3.13 The partnership of Con and Rad started on June 1, 200C with an initial investment of P 200,000 and P 250,000, respectively. After one year of operations, the partnership reported a loss of P 8,000 after treating interest and salary allowances as expenses. In the partnership contract, the following provisions were indicated: * 10% interest on the original investment * Salaries of P 20,000 and P 48,000 for Con and Rad, respectively. * Con is allowed a bonus of 10% of the net income before interest, salary and bonus allowances. * Residual income: equally REQUIRED: Show how the profit or loss was distributed.
Partnership Accounting
A partnership is a kind of arrangement between two or more people whereby they agree to manage the business operations and share its profits and losses in an agreed ratio between them. The agreement that is drafted and signed by the partners of the firm is termed as partnership deed and contains various important clauses agreed between the partners such as profit/loss sharing, interest on capital, remuneration allocation of each partner, drawings, admission of a new partner, etc.
Partner Admission and Withdrawal
A partnership is a kind of arrangement between two or more people whereby they agree to manage the business operations and share its profits and losses in an agreed ratio between them. The agreement that is drafted and signed by the partners of the firm is termed as a partnership deed and contains various important clauses agreed between the partners such as profit/loss sharing, interest on capital, remuneration allocation of each partner, drawings of a partner, etc.
Step by step
Solved in 2 steps
