Several Years ago GO and Bato formed GB Partnershp. The partnership agreement states that each partner is to receive a salary of P10,000 per month and 5% interest on beginning-of-the-year capital balances; any remainder would be divided between Go and Bato in the ratio 2:3, respectively. The unadjusted trial balance of GB Partnership as of December 31, 2020, appears as follows: Debits Credits Cash P500,000 Accounts Payable 350,000 Accounts Receivable 300,000 Notes Payable 200,000 Inventory, 1/1/2020 400,000 Go, Capital 750,000 Furnitires & Fixt (net) 150,000 Bato, Capital 620,000 Building, net 300,000 Sales 800,000 Go, drawing 100,000 Bato, drawing 120,000 Purchases 600,000 Operating Expenses 250,000 Total 2,720,000 Total P2,720,000 Additional Information: 1. December 31, 2020, inventory was P550,000. 2020 purchases of P600,000 were recorded using the periodic inventory method. 2. Depreciation for 2020 on furniture and fixtures and building is determined to be 10% and 20% respectively, of net valuation. 3. On July 1, 2020, the partnership recorded a P100,000 additional capital contribution by Bato. Go made no additional capital contributions during the year: Determine the share of partner Go on the ne income of 2020.
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.
Several Years ago GO and Bato formed GB Partnershp. The
Debits Credits
Cash P500,000 Accounts Payable 350,000
Inventory, 1/1/2020 400,000 Go, Capital 750,000
Furnitires & Fixt (net) 150,000 Bato, Capital 620,000
Building, net 300,000 Sales 800,000
Go, drawing 100,000
Bato, drawing 120,000
Purchases 600,000
Operating Expenses 250,000
Total 2,720,000 Total P2,720,000
Additional Information:
1. December 31, 2020, inventory was P550,000. 2020 purchases of P600,000 were recorded using the periodic inventory method.
2.
3. On July 1, 2020, the partnership recorded a P100,000 additional capital contribution by Bato. Go made no additional capital contributions during the year:
Determine the share of partner Go on the ne income of 2020.
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