ple and Mack had the lollowing clause in their partnership agreement: The partners allowed salaries as follows: Cole, P90,000; Mack, P72,000: and these salaries are to be charged against the earnings of the business. In addition, Cole is to be allowed a bonus of 20% of the net income after salaries and interest have been deducted, and this bonus is to be considered as an expense of the business. Any remainder is to be divided equally." If the net income after partners' salaries, interest, and bonus amounts to P397,500, and the interest on Cole's capital account is P37,280 and on Mack's capital account is P65,560, how much must be the share of Cole on the partnership net income?

ple and Mack had the lollowing clause in their partnership agreement: The partners allowed salaries as follows: Cole, P90,000; Mack, P72,000: and these salaries are to be charged against the earnings of the business. In addition, Cole is to be allowed a bonus of 20% of the net income after salaries and interest have been deducted, and this bonus is to be considered as an expense of the business. Any remainder is to be divided equally." If the net income after partners' salaries, interest, and bonus amounts to P397,500, and the interest on Cole's capital account is P37,280 and on Mack's capital account is P65,560, how much must be the share of Cole on the partnership net income?

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter15: Partnership Accounting

Section: Chapter Questions

Problem 1PA: The partnership of Tatum and Brook shares profits and losses in a 60:40 ratio respectively after...

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