In its first year of operations, the partnership of Li, Kwan, and Yu earned a profit of P 300,000 before providing salaries of P 60,000 and P 40,000 per annum for Li and Kwan, respectively. Their capital contributions and profit and loss sharing ratio are as follows: Capital Profit & Loss Ratio Li- P 500,000 40% Kwan 300,000 30% Yu - 200,000 P 1,000,000 30% Total- 100% 20. How much of the profit should be distributed to Kwan? a. P 60,000. C. P 140,000. b. P 100,000. d. P 150,000.
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.
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