their capital in the partnership is to reflect this ratio. 7. The partners further agreed to divide profits and losses in the following manner: A. An annual salary of P120,000 and P150,000 is to be given to HEAD and ACHE, which is to be taken out evenly during the year by each partner. B. 10% interest on beginning capital is to be given to each partner. C. 20% bonus after interest is to be given to ACHE. For 20x10, the partnership reported net income of P350,000, treating the salaries as a partnership expense. Determine the adjusted capital balance of HEAD on June 1, 20x10.
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.
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