A, B, and C are partners in an accounting firm. Their capita account balances at the year-end were A P120,000; B P140,000; C P80,000. They share profits and losses on a 3:3:4 ratio, after the following special terms: • Interest of 10% shall be paid on that portion of a partner's capital in excess of P100,000. • Quarterly salaries of P5,000, P5,000 and P6,000 shall be paid to partners A, B, and C, respectively. • Partner C is to receive a bonus of 10% of net income after salaries, interest and bonus. Assuming a net income of P60,000 for the year, the total profit share of partner C was:
A, B, and C are partners in an accounting firm. Their capita account balances at the year-end were A P120,000; B P140,000; C P80,000. They share profits and losses on a 3:3:4 ratio, after the following special terms: • Interest of 10% shall be paid on that portion of a partner's capital in excess of P100,000. • Quarterly salaries of P5,000, P5,000 and P6,000 shall be paid to partners A, B, and C, respectively. • Partner C is to receive a bonus of 10% of net income after salaries, interest and bonus. Assuming a net income of P60,000 for the year, the total profit share of partner C was:
Chapter19: Corporations: Distributions Not In Complete Liquidation
Section: Chapter Questions
Problem 1BCRQ
Related questions
Question
Transcribed Image Text:A, B, and C are partners in an accounting firm. Their capital
account balances at the year-end were A P120,000; B
P140,000; C P80,000. They share profits and losses on a
3:3:4 ratio, after the following special terms:
o Interest of 10% shall be paid on that portion of a
partner's capital in excess of P100,000.
• Quarterly salaries of P5,000, P5,000 and P6,000 shall
be paid to partners A, B, and C, respectively.
• Partner C is to receive a bonus of 10% of net income
after salaries, interest and bonus.
Assuming a net income of P60,000 for the year, the total
profit share of partner C was:
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 3 steps
Recommended textbooks for you
Financial Accounting
Accounting
ISBN:
9781305088436
Author:
Carl Warren, Jim Reeve, Jonathan Duchac
Publisher:
Cengage Learning