AA and BB formed a partnership in January 1, 2016 and made the following investments and withdrawals during the year. AA BB Investments Withdrawal Investments Withdrawal January 1 June 1 84,000 P. 72,000 54,000 18,000 36,000 August 1 December 1 9,000 27,000 The partnership's profit and loss agreement provides for monthly salary of P15,000 for each partner. AA is to receive a bonus of 25% on net income after salaries and bonus. The partners are also to receive interest of 5% per annum on average capital balances. Any remainder is to be allocated based on their ending capital balances. Assuming the income summary has a credit balance of P480,000. Determine which of the following statements is incorrect in the partnership operation: AA is to receive a bonus of P48,000 b. a. BB has a share of 40% in the P75,500 remainder or balance AA, Capital account will increase by P283,000 d. C. BB will receive P2,625 interest on average capital balance
AA and BB formed a partnership in January 1, 2016 and made the following investments and withdrawals during the year. AA BB Investments Withdrawal Investments Withdrawal January 1 June 1 84,000 P. 72,000 54,000 18,000 36,000 August 1 December 1 9,000 27,000 The partnership's profit and loss agreement provides for monthly salary of P15,000 for each partner. AA is to receive a bonus of 25% on net income after salaries and bonus. The partners are also to receive interest of 5% per annum on average capital balances. Any remainder is to be allocated based on their ending capital balances. Assuming the income summary has a credit balance of P480,000. Determine which of the following statements is incorrect in the partnership operation: AA is to receive a bonus of P48,000 b. a. BB has a share of 40% in the P75,500 remainder or balance AA, Capital account will increase by P283,000 d. C. BB will receive P2,625 interest on average capital balance
Chapter10: Partnerships: Formation, Operation, And Basis
Section: Chapter Questions
Problem 2BCRQ
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Transcribed Image Text:AA and BB formed a partnership in January 1, 2016 and made the following investments and withdrawals during the year:
AA
Withdrawal
BB
Investments
Investments
Withdrawal
January 1
June 1
72,000
84,000
54,000
18,000
36,000
August 1
December 1
9,000
27,000
The partnership's profit and loss agreement provides for monthly salary of P15,000 for each partner. AA is to receive a bonus of 25% on net
income after salaries and bonus. The partners are also to receive interest of 5% per annum on average capital balances. Any remainder is to
be allocated based on their ending capital balances. Assuming the income summary has a credit balance of P480,000. Determine which of the
following statements is incorrect in the partnership operation:
AA is to receive a bonus of P48,000
b.
a.
BB has a share of 40% in the P75,500 remainder or balance
C.
AA, Capital account will increase by P283,000
d.
BB will receive P2,625 interest on average capital balance
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