The partnership of DDD was formed on January 1. 2020. The original cash investment were as follows: Dino, P384,000;, Diana P576,000 and Dezie P864,000. According to the partnership contract, profit and loss will be divided among the partners as follows: Salaries of P57,600 for Dino, P48,000 for Diana and P38,400 for Dezie. Interest of 8% on average capital balances during the year. 10% Bonus to Dino after salary allowances. Remaining profit will be divided equally The profit of the partnership for the year ended December 31, 2020 Was P456,000. Dino invested additional P96,000 in the partnership on July 1 2020. Dezie withdrew P144,000 from the partnership on October 1, 2020. Compute the total share of profit for each partner.
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
- Salaries of P57,600 for Dino, P48,000 for Diana and P38,400 for Dezie.
- Interest of 8% on average capital balances during the year.
- 10% Bonus to Dino after salary allowances.
- Remaining profit will be divided equally
The profit of the partnership for the year ended December 31, 2020 Was P456,000. Dino invested additional P96,000 in the partnership on July 1 2020. Dezie withdrew P144,000 from the partnership on October 1, 2020.
Compute the total share of profit for each partner.
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