Refozar, Martinez and Magsino formed a partnership. It’s on a calendar year basis. The profit-sharing arrangements are as follows: Until June 30, 2019, the annual salaries are provided as follows: Martinez, P40,000 and Magsino, P20,000. The residual profit will be shared in the ratio of 6:2:2. From July 1,2019, the salaries will be discontinued and the profit to be divided in the revised ratio of 5:3:2. Profit for the year ended Dec. 31, 2019 was P400,000 before charging partners’ salaries, accruing evenly through the year, and after charging an expense of P40,000, which it was agreed related wholly to the first six months of the year. How should the profit for the year be divided among the partners? Refozar P182,000 Martinez P130,000 Magsino P88,000 a. b. P200,000 P116,000 P84,000 c. P198,000 P118,000 P88,000 d. P180,000 P132,000 P88,000
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.
Refozar, Martinez and Magsino formed a
arrangements are as follows:
Until June 30, 2019, the annual salaries are provided as follows: Martinez, P40,000 and
Magsino, P20,000. The residual profit will be shared in the ratio of 6:2:2.
From July 1,2019, the salaries will be discontinued and the profit to be divided in the revised ratio
of 5:3:2.
Profit for the year ended Dec. 31, 2019 was P400,000 before charging partners’ salaries, accruing evenly
through the year, and after charging an expense of P40,000, which it was agreed related wholly to the
first six months of the year. How should the profit for the year be divided among the partners?
| Refozar P182,000 |
Martinez P130,000 |
Magsino P88,000 |
a. |
b. P200,000 P116,000 P84,000
c. P198,000 P118,000 P88,000
d. P180,000 P132,000 P88,000
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