AA, BB, and CC are partners with average capital balances during 2021 of P360,000, P180,000, and P120,000, respectively. Partners receive 10% interest on their average capital balances. After deducting salaries of P90,000 to AA and P60,000 to CC, the residual profit or loss is divided equally. In 2021, the partnership sustained a P99,000 loss before interest and salaries to partners. By what amount should AA's capital account change?
AA, BB, and CC are partners with average capital balances during 2021 of P360,000, P180,000, and P120,000, respectively. Partners receive 10% interest on their average capital balances. After deducting salaries of P90,000 to AA and P60,000 to CC, the residual profit or loss is divided equally. In 2021, the partnership sustained a P99,000 loss before interest and salaries to partners. By what amount should AA's capital account change?
Chapter15: Partnership Accounting
Section: Chapter Questions
Problem 1PA: The partnership of Tatum and Brook shares profits and losses in a 60:40 ratio respectively after...
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Transcribed Image Text:AA, BB, and CC are partners with average capital balances during 2021 of P360,000,
P180,000, and P120,000, respectively. Partners receive 10% interest on their average
capital balances. After deducting salaries of P90,000 to AA and P60,000 to CC, the
residual profit or loss is divided equally. In 2021, the partnership sustained a P99,000
loss before interest and salaries to partners. By what amount should AA's capital
account change?
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