EXERCISE 6-12. Problem Solving 3. Alger is trying to decide whether to accept a salary allowance of P80,000 or a salary allowance of P50,000 plus a bonus of 10% of net income after salary and bonus as a means of allocating profit among the partners. Salaries traceable to the other partners are estimated to be P200,000. You are required to determine the amount of partnership net income that would be necessary so that Alger would be indifferent between the two.

EXERCISE 6-12. Problem Solving 3. Alger is trying to decide whether to accept a salary allowance of P80,000 or a salary allowance of P50,000 plus a bonus of 10% of net income after salary and bonus as a means of allocating profit among the partners. Salaries traceable to the other partners are estimated to be P200,000. You are required to determine the amount of partnership net income that would be necessary so that Alger would be indifferent between the two.

SWFT Comprehensive Volume 2019

42nd Edition

ISBN:9780357233306

Author:Maloney

Publisher:Maloney

Chapter21: Partnerships

Section: Chapter Questions

Problem 50P

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PROBLEM 3. Glenda is trying to decide whether to accept a bonus of 25% of net income after salaries and bonus or a salary of P97,500 plus bonus of 10% of net income after salaries and bonus as a means of allocating profit among the partners. Salaries traceable to the other partners are estimated to be P450,000. What amount of income would be necessary so that Glenda would consider the choices to be equal? P1,100,000 P1,197,000 a. b. с. P650,000 d. P1.262.500
Task 2: X and Y share income of their partnership in a 2:3 ratio. X and Y receive salaries of $18,000 and $12,000, respectively. a) How would they share a net income of $30,000 (before salaries are distributed)? b) You should make the journal entry for this activity. c) In which ways will the results in a) and b) be changed if the ratio is 1:4?
6. Martinez is trying to decide whether to accept a salary of P60,000 or a salary of P25,000 plus a bonus of 20% of net income after salaries and bonus as a means of allocating profit among the partners. Salaries traceable to the other partners are estimated to be P75,000. What amount of income would be necessary so that Martinez would consider the choices to be equal? a. P175,000 b. P210,000 C. P285,000 d. P310,000
A is trying to decide whether to accept a salary of P40,000 or a salary of P25,000 plus a bonus of 10% of net income before salary and bonus as a means of allocating profit among the partners. Salaries traceable to the other partners are estimated to be P100,000. What amount of income would be necessary so that A would consider the choices to be equal?
Romeo is trying to decide whether to accept a salary of P40,000 or a salary of P25,000 plus a bonus of 10% of net income after salary and bonus as a means of allocating profit among the partners. Salaries traceable to the other partners are estimated to be P100,000. What amount of income would be necessary so that Romeo would consider the choices equal: A. 165,000 B. 290,000 C. 265,000 D. 305,000
Based on the above information, kindly answer the following: 1. In the profit distribution schedule, the salary allowance of Tom will be? 2. Of the P1,404,000 net profit of the partnership, the share of Rey will be? 3. In the profit distribution schedule, the total salary allowance will be? Please answer complete required1,2,3
2. Use the following information for the next three cases: The partnership agreement of A, B and C stipulates the following: Partners A and C shall receive annual salaries of P12,000 and P8,000, respectively. DA bonus of 10% of profit after salaries but before deduction of bonus shall be given to Partner A, the managing partner. Each partner shall receive 10% interest on average capital investments. TAny remaining profit or loss shall be shared as follows: 40% to A and 30% each to B and C. The average capital investments of partners during the year are as follows: AP100,000 B 60,000 C 120,000 Case #1: The partnership earns profit of P100,000. Requirement: Compute for the respective shares of the partners on the partnership profit. Case #2: The partnership earns profit of P10,000. Requirement: Compute for the respective shares of the partners on the partnership profit. Case #3: The partnership incurs loss of P20,000. Requirement: Compute for the respective shares of the partners on the…
16. RRR is trying to decide whether to accept a bonus of 25% of net income after salaries and bonus or a salary of P97,500 plus a bonus of 10% of net income after salaries and bonus as a means of allocating profit among the partners. Salaries traceable to the other partners are estimated to be P450,000. What amount of income would be necessary so that RRR would consider the choices to be equal? A. P1,100,000B. P1,197,500C. P650,000D. P1,262,500
Partners A, B and C are contemplating using the following profit distribution plan: Salary is to be given to A in the amount of P60,000, with the remainder in an equal rates to all partners. A is guaranteed a minimum profit share of P100,000. a) Profit for the first year is P240,000 b) Profit for the second year is P150,000. Compute for the profit share of partners B and C in both years.
Maxwell is trying to decide whether to accept a salary of P40,000 or salary of P25,000 plus a bonus of 10% of net income after salaries and bonus as a means of allocating profit among partners. Salaries traceable to the other partners are estimated to be P100,000. What amount of income would be necessary so that Maxwell would consider choices to be equal?
EXERCISE 6-13. Problem Solving 4. Alloy and Aeson are partners who share profits and losses in the ratio 60% and 40%, respectively. Alloy and Aeson are given salary allowances of P120,000 and P60,000, respectively. The partners are also paid interest on their ending capital balances. In 2019, amounts of interest received by Alloy and Aeson were P60,000 and P24,000, respectively. Subsequent allocations using profit and loss ratio were then made after salary allowances and interest payments had been provided for. You are required to determine the total partnership net income if Aeson's share in the residual income (balance after salary allowances and interest) was P120,000 in 2019.
9. A partnership showed the following account balances: sales, P70,000; cost of sales,P40,000; operating expenses. P10,000; partners’ salaries, P13,000; interest paid tobanks, P2,000; interest allowances on average capital balances, P2,500 and partners’drawings, P8,000. How much is the partnership profit?