Juan and Pedro’s partnership agreement shows that they will receive a salary of P150,000 and P100,000, respectively. Should there be a remainder, such will be divided based on their average capital balances. Below shows information in their respective capital balances:Juan, capital ending balance – P 3,000,000Debits: June 1 - P 500,000Credits: March 30 – P 1,000,000Credits: October 30 – P 500,000 Pedro, capital ending capital balance – P 4,500,000Credits: May 1 – P 1,000,000Credits: August 31 – P 1,000,000Income for the year amounted to P 300,000. How much profit will be distributed to Juan? Problem Solving:Juan and Pedro's partnership agreement shows that they willreceive a salary of P 150,000 and P 100,000, respectively. Shouldthere be a remainder, such will be divided based on their averagecapital balances. Below shows information in their respectivecapital balances:Juan, capital ending balance -P 3,000,000Debits: June 1-P 500,000Credits: March 30 – P 1,000,000Credits: October 30 - P 500,000Pedro, capital ending capital balance - P 4,500,000Credits: May 1-P1,000,000Credits: August 31 - P 1,000,000Income for the year amounted to P 300,000. How much profitwill be distributed to Juan?

The calculation of profit that will be distributed to Juan is shown hereunder : Income for the year…

Answered: Income for the year amounted to P…

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter15: Partnership Accounting

Section: Chapter Questions

Problem 3EA: The partnership of Tasha and Bill shares profits and losses in a 50:50 ratio, and the partners have...

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Question

Juan and Pedro’s partnership agreement shows that they will receive a salary of P150,000 and P100,000, respectively. Should there be a remainder, such will be divided based on their average capital balances. Below shows information in their respective capital balances:

Juan, capital ending balance – P 3,000,000
Debits: June 1 - P 500,000
Credits: March 30 – P 1,000,000
Credits: October 30 – P 500,000

Pedro, capital ending capital balance – P 4,500,000
Credits: May 1 – P 1,000,000
Credits: August 31 – P 1,000,000

Income for the year amounted to P 300,000. How much profit will be distributed to Juan?

Problem Solving:
Juan and Pedro's partnership agreement shows that they will
receive a salary of P 150,000 and P 100,000, respectively. Should
there be a remainder, such will be divided based on their average
capital balances. Below shows information in their respective
capital balances:
Juan, capital ending balance -P 3,000,000
Debits: June 1-P 500,000
Credits: March 30 – P 1,000,000
Credits: October 30 - P 500,000
Pedro, capital ending capital balance - P 4,500,000
Credits: May 1-P1,000,000
Credits: August 31 - P 1,000,000
Income for the year amounted to P 300,000. How much profit
will be distributed to Juan?

Definition Definition Arrangement between two or more people whereby they agree to manage business operations and share its profits and losses in an agreed ratio. The agreement 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, and drawings of a partner.

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