Ruel and Renan have a capital balances at the beginning of the year of P600,000 and P675,000, respectively. They share profit as follows 1. Interest of 8% on beginning capital balances 2 Salary allowances of P225,000 to Bueno and P115,000 to Renan 3. Balance in the ratio of 3.2. The partnership realized a profit of P375,000 during the current year before interest and salary allowances to partners. Instructions: 1. Show how the profit of P375,000 should be divided behween Ruel and Renan 2. Assuming that Ruel and Renan simply agree to share proft in a 32 ratio with a minimum of P175,000 guaranteed to Renan, show the profit of P375,000 should be divided. 3 Give the journal entry to record the division of profit in No. 1 4 Give the journal entry to record the division of profit in no. 2 lote: After the journal entries show your computations in good form.

Ruel and Renan have a capital balances at the beginning of the year of P600,000 and P675,000, respectively. They share profit as follows 1. Interest of 8% on beginning capital balances 2 Salary allowances of P225,000 to Bueno and P115,000 to Renan 3. Balance in the ratio of 3.2. The partnership realized a profit of P375,000 during the current year before interest and salary allowances to partners. Instructions: 1. Show how the profit of P375,000 should be divided behween Ruel and Renan 2. Assuming that Ruel and Renan simply agree to share proft in a 32 ratio with a minimum of P175,000 guaranteed to Renan, show the profit of P375,000 should be divided. 3 Give the journal entry to record the division of profit in No. 1 4 Give the journal entry to record the division of profit in no. 2 lote: After the journal entries show your computations in good form.

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 7SPB

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