On Jan. 1, 2016, the Mones, Pitular and Tuazon Partnership was formed with initial investments by the partners as follows: Mones P2,000,000 Pitular 1,000,000 1,000,000 Tuazon According to the partnership agreement, profit or loss is to be divided among the partners as follows: 1. Salaries of P120,000 for Mones, P60,000 for Pitular and P60,000 for Tuazon. 2. Interest at 5% on the original capital balances. 3. The remainder to be divided among Mones, Pitular, and Tuazon in a ratio of 4:1:1, respectively. The partnership reported profit of P350,000 for the year ended Dec. 31, 2016.
On Jan. 1, 2016, the Mones, Pitular and Tuazon Partnership was formed with initial investments by the partners as follows: Mones P2,000,000 Pitular 1,000,000 1,000,000 Tuazon According to the partnership agreement, profit or loss is to be divided among the partners as follows: 1. Salaries of P120,000 for Mones, P60,000 for Pitular and P60,000 for Tuazon. 2. Interest at 5% on the original capital balances. 3. The remainder to be divided among Mones, Pitular, and Tuazon in a ratio of 4:1:1, respectively. The partnership reported profit of P350,000 for the year ended Dec. 31, 2016.
SWFT Essntl Tax Individ/Bus Entities 2020
23rd Edition
ISBN:9780357391266
Author:Nellen
Publisher:Nellen
Chapter14: Partnerships And Limited Liability Entities
Section: Chapter Questions
Problem 2BD
Related questions
Question
100%
Determine the partner's share in the profit under each of the following independent situations
Transcribed Image Text:00 Jan. 1, 2016, the Mones, Pitular and Tuazon Partnership was formed with initial
investments by the partners as follows:
Mones
P2,000,000
Pitular
1,000,000
Tuazon
1,000,000
According to the partnership agreement, profit or loss is to be divided among the
partners as follows:
1. Salaries of P120,000 for Mones, P60,000 for Pitular and P60,000 for Tuazon.
2. Interest at 5% on the original capital balances.
3. The remainder to be divided among Mones, Pitular, and Tuazon in a ratio of 4:1:1,
respectively.
The partnership reported profit of P350,000 for the year ended Dec. 31, 2016.
Required:
Determine the partners' share in the profit under each of the following independent
situations:
1. Partner's salaries and interest on capital balances should be fully allocated and any
deficiency between these allocations and profit is to be divided among Mones,
Pitular, and Tuazon in the ratio 4:1:1, respectively.
2. Partner's salaries and interest on capital balances should be made only, to the
extent that the profit can provide.
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 2 steps with 1 images
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
College Accounting, Chapters 1-27
Accounting
ISBN:
9781337794756
Author:
HEINTZ, James A.
Publisher:
Cengage Learning,
Financial Accounting
Accounting
ISBN:
9781337272124
Author:
Carl Warren, James M. Reeve, Jonathan Duchac
Publisher:
Cengage Learning
College Accounting, Chapters 1-27
Accounting
ISBN:
9781337794756
Author:
HEINTZ, James A.
Publisher:
Cengage Learning,
Financial Accounting
Accounting
ISBN:
9781337272124
Author:
Carl Warren, James M. Reeve, Jonathan Duchac
Publisher:
Cengage Learning
Financial Accounting: The Impact on Decision Make…
Accounting
ISBN:
9781305654174
Author:
Gary A. Porter, Curtis L. Norton
Publisher:
Cengage Learning
Principles of Accounting Volume 1
Accounting
ISBN:
9781947172685
Author:
OpenStax
Publisher:
OpenStax College
Financial Accounting
Accounting
ISBN:
9781305088436
Author:
Carl Warren, Jim Reeve, Jonathan Duchac
Publisher:
Cengage Learning