Ables and Galang divide partnership profits and losses solely on the basis of their average capital balances. Ables had P275,000 invested during all of 2016; Galang had invested P200,000 invested from January 1 to August 31, and he invested another P75,000 on September 1. If profit was P800,000 during 2016, how much should each partner receive?
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.
Distribution of
Ables and Galang divide partnership profits and losses solely on the basis of their average capital balances. Ables had P275,000 invested during all of 2016; Galang had invested P200,000 invested from January 1 to August 31, and he invested another P75,000 on September 1. If profit was P800,000 during 2016, how much should each partner receive?
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