Ashok, Brijesh and Cheena are partners sharing profits and losses in the ratio of 2 : 2 : 1. Ashok and Brijesh have guaranteed that Cheena share in any year shall be less than Rs. 20,000. The net profit for the year ended March 31, 2017 amounted to Rs. 70,000. Prepare Profit and Loss Appropriation Account.

Ashok, Brijesh and Cheena are partners sharing profits and losses in the ratio of 2 : 2 : 1. Ashok and Brijesh have guaranteed that Cheena share in any year shall be less than Rs. 20,000. The net profit for the year ended March 31, 2017 amounted to Rs. 70,000. Prepare Profit and Loss Appropriation Account.

Income Tax Fundamentals 2020

38th Edition

ISBN:9780357391129

Author:WHITTENBURG

Publisher:WHITTENBURG

Chapter10: Partnership Taxation

Section: Chapter Questions

Problem 14MCQ

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James, Gian, and Jane formed a partnership on January 1, 2015, with investments of P100,000, P150,000, and P200,000, respectively. For division of income, they agreed to (1) interest of 10% of the beginning capital balance each year, (2) annual compensation of P10,000 to Gian, and (3) sharing the remainder of the income or loss in a ratio of 20% for James, and 40% each for Gian and Jane. Net income was P150,000 in 2015 and P180,000 in 2016. Each partner withdrew P1,000 for personal use every month during 2015 and 2016. What was James' share of income for 2015? A. 63,000 B. 53,000 C. 58,000 D. 29,000
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JJ and KK are partners who share profits and losses in the ratio of 60% and 40%, respectively. JJ’s salary is P60,000 and P30,000 for KK. The partners are also paid interest on their average capital balances. In 2015, JJ received P30,000 of interest and KK, P12,000. The profit and loss allocation is determined after deductions for the salary and interest payments. If KK’s share in the residual income was P60,000 in 2015, what was the total partnership income? A. 192,000 B. 345,000 C. 282,000 D. 387,000
Charles, Ward, and Nelson formed a partnership on January 1, 2016, with investments of $100,000, $150,000, and $200,000, respectively. For division of income, they agreed to (1) interest of 10% of the beginning capital balance each year, (2) annual compensation of $10,000 to Ward, and (3) sharing the remainder of the income or loss in a ratio of 20% for Charles, and 40% each for Ward and Nelson. Net income was $150,000 in 2016 and $180,000 in 2017. Each partner withdrew $12,000 annually for personal use every during 2016 and 2017.What was Nelson's capital balance at the end of 2016?
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