In January 2013, Edi Thomas and George Lopez agreed to produce and sell chocolate candiesunder the company name T&L Chocolates. Thomas contributed P580,000 in cash to the business.Lopez contributed the building and equipment, valued at P480,000 and P230,000, respectively.The partnership had an income of P675,000 during 2013 but was less successful during 2014,when income was only P580,000. e. The partners agreed to share income by allowing salaries of $83,000for Thomas and $60,000 for Lopez, and dividing the remainder by 60percent for Thomas and 40% for Lopez.DISTRIBUTION OF INCOME BASED ON AGREED AMOUNT OF SALARY PERPARTNER WITH THE REMAINDER SHARED ON SEPCIFIC PERCENTAGES.2013Income DistributedIncome of PartnerTotal Income for DistributionP675,000.00Distribution of Salaries:George Lopez(41)Edi Thomas(42)(43)(44)Remaining Income After SalariesDistribution of remaining income:George Lopez(45)Edi Thomas(46)(47)Remaining income(48)Income of Partners(49)(50)P675,000.002014Income of PartnerIncome Distributed580,000.00Total Income for DistributionPDistribution of Salaries:George Lopez(51)Edi Thomas(52)(53)(54)Remaining Income After SalariesDistribution of remaining income:George Lopez(55)Edi Thomas(56)(57)Remaining income(58)Income of Partners(59)(60)580,000.00P

The income distribution is as follows:

Answered: e. The partners agreed to share income…

e. The partners agreed to share income by allowing salaries of $83,000 for Thomas and $60,000 for Lopez, and dividing the remainder by 60 percent for Thomas and 40% for Lopez.

Excel Applications for Accounting Principles

4th Edition

ISBN:9781111581565

Author:Gaylord N. Smith

Publisher:Gaylord N. Smith

ChapterMB: Model-building Problems

Section: Chapter Questions

Problem 9M

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