The partnership of Ben and Ban has the following provisions in the partnership agreement: 1. A partner earns 10% interest on the excess of his average capital over the other partner. 2. Ben and Ban are allowed annual salaries of P300,000 and P200,000, respectively. 3. Any remaining profit or loss is to be divided in the ratio of 40:60. The average capital of Ben is P1,000,000 and that of Bunye is P500,000. Instructions: Prepare a profit distribution schedule assuming the profit f the partnership is (a) P800,000; and (b) P400,000.
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.
Trending now
This is a popular solution!
Step by step
Solved in 4 steps with 1 images
