The partnership contract of A,B and C provided for the division of net income and losses in the following manner. Bonus of 20% of income before bonus and allowances to A Interest 15% on average capital account balances to each partner Remaining income or loss, equally to each partner. Net income for A, B and C Partnership for 2019 was 90,000 and the average capital account balances for that year were A, 100,000, B, 200,000 and C, 300,000. How much of the 90,000 partnership profit should be distributed to A?
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.
- The partnership contract of A,B and C provided for the division of net income and losses in the following manner.
- Bonus of 20% of income before bonus and allowances to A
- Interest 15% on average capital account balances to each partner
- Remaining income or loss, equally to each partner.
Net income for A, B and C Partnership for 2019 was 90,000 and the average capital account balances for that year were A, 100,000, B, 200,000 and C, 300,000. How much of the 90,000 partnership profit should be distributed to A?
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