R and S were organized and began operations on March 1, 20x1. On that date, R invested P 150,000 and S invested computer equipment with current fair value of P180,000. Because of shortage of cash on November 1, 20x1 S invested additional cash of P60,000 in the partnership. The partnership contract includes the following remuneration plan: R S Monthly salary (recognized as expense) P10,000 P20,000 Annual interest on beginning capital 12% 12% Bonus on the net profit before salaries and interest but after bonus 20% - Balance Equally The salary was to be withdrawn by each partner in monthly installments. The partnership’s net profit for 2005 is P120,000. What are the capital balances of the partners on December 31, 20x1?
R and S were organized and began operations on March 1, 20x1. On that date, R invested P 150,000 and S invested computer equipment with current fair value of P180,000. Because of shortage of cash on November 1, 20x1 S invested additional cash of P60,000 in the partnership. The partnership contract includes the following remuneration plan: R S Monthly salary (recognized as expense) P10,000 P20,000 Annual interest on beginning capital 12% 12% Bonus on the net profit before salaries and interest but after bonus 20% - Balance Equally The salary was to be withdrawn by each partner in monthly installments. The partnership’s net profit for 2005 is P120,000. What are the capital balances of the partners on December 31, 20x1?
College Accounting, Chapters 1-27
23rd Edition
ISBN:9781337794756
Author:HEINTZ, James A.
Publisher:HEINTZ, James A.
Chapter19: Accounting For Partnerships
Section: Chapter Questions
Problem 3SEB
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R and S were organized and began operations on March 1, 20x1. On that date, R invested P 150,000 and S invested computer equipment with current fair value of P180,000. Because of shortage of cash on November 1, 20x1 S invested additional cash of P60,000 in the partnership. The partnership contract includes the following remuneration plan:
| R | S | |
|
Monthly salary (recognized as expense) |
P10,000 | P20,000 |
| Annual interest on beginning capital | 12% | 12% |
|
Bonus on the net profit before salaries and interest but after bonus |
20% | - |
| Balance Equally |
The salary was to be withdrawn by each partner in monthly installments. The partnership’s net profit for 2005 is P120,000.
What are the capital balances of the partners on December 31, 20x1?
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