3.16 After six months of operations, the partnership of Pat, Neri, and Cip made a profit of P 372,000 after deducting the partners' Cip made a profit of P 372,000 after deducting the partner interest and salary allowances but before the bonus allowance es Cip, the managing partner. Their original investments on January 1, 200G were P 200,000, P 300,000, and P 500,000 for Pat, Neri, and Cin respectively. Later, they agreed to adjust their capitals as follows: P 240,000 360,000 Pat Neri 400,000 P1,000,000 Cip Total Their partnership contract contains the following provisions as to the profit and loss sharing ratio: 6% interest will be allowed on the original capital%3; Annual salaries: P 120,000 144,000 180,000 • Cip is entitled to a bonus of 20% of the net profit after the interest and salary allowances but before the bonus. Remainder of the profit is to be divided using the adjusted Pat Neri Cip capital ratio. The partners withdrew the following amounts during the period: P 30,000 for Pat, P 40,000 for Neri, and P 50 000 for Ci
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.
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