FINANCIAL ACCT-CONNECT
8th Edition
ISBN: 9781266627903
Author: Wild
Publisher: INTER MCG
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Problem #4
Distribution of Profits or Losses Based on Partners' Agreement
Ables and Galang divide partnership profits and losses solely on the basis of their
average capital balances. Ables had P275,000 invested during all of 2019; Galang nad
P200,000 invested from January 1 to August 31, and he invested another P75,000 on
September 1. If profit was P800,000 during 2019, how much should each partner
receive?
Problem 2. The partnership agreement of Wanwan, Layla and Claude provides for the year-end allocation of net income in the following order:
First, Wanwan is to receive 10% of net income up to P200,000 and 20% over 200,000
Second, Layla and Claude are each too receive 5% of the remaining income over P300,000.
The balance of income is to be allocated equally among the three partners.
The partnership income was P500,000 before any allocations to partners. What amount should be allocated to each partner?
Chapter D Solutions
FINANCIAL ACCT-CONNECT
Ch. D - Prob. 1DQCh. D - Prob. 2DQCh. D - Prob. 3DQCh. D - Prob. 4DQCh. D - Prob. 5DQCh. D - Prob. 6DQCh. D - Prob. 7DQCh. D - Prob. 8DQCh. D - Prob. 9DQCh. D - Prob. 10DQ
Ch. D - Prob. 11DQCh. D - Prob. 12DQCh. D - Prob. 1QSCh. D - Prob. 2QSCh. D - Prob. 3QSCh. D - Prob. 4QSCh. D - Prob. 5QSCh. D - Prob. 6QSCh. D - Prob. 7QSCh. D - Prob. 8QSCh. D - Prob. 1ECh. D - Prob. 2ECh. D - Prob. 3ECh. D - Prob. 4ECh. D - Prob. 5ECh. D - Prob. 6ECh. D - Prob. 7ECh. D - Prob. 8ECh. D - Prob. 9ECh. D - Prob. 10ECh. D - Prob. 11ECh. D - Prob. 12ECh. D - Prob. 1PSACh. D - Prob. 2PSACh. D - Prob. 3PSACh. D - Prob. 4PSACh. D - Prob. 5PSACh. D - Prob. 1PSBCh. D - Prob. 2PSBCh. D - Prob. 3PSBCh. D - Prob. 5PSBCh. D - Prob. 3BTN
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- The partnership of Chase and Chloe shares profits and losses in a 70:30 ratio respectively after Chloe receives a $10,000 salary. Prepare a schedule showing how the profit and loss should be divided, assuming the profit or loss for the year is: A. $ 30,000 B. $ 6,000 C. ($10,000)arrow_forwardThe partnership of Magda and Sue shares profits and losses in a 50:50 ratio after Mary receives a $7,000 salary and Sue receives a $6,500 salary. Prepare a schedule showing how the profit and loss should be divided, assuming the profit or loss for the year is: A. $10,000 B. $5,000 C. ($12,000) In addition, show the resulting entries to each partners capital account.arrow_forwardJuan contributes marketable securities to a partnership. The book value of the securities is $7,000 and they have a current market value of $10,000. What amount should the partnership record in Juans Capital account due to this contribution? A. $10,000 B. $7,000 C. $3,000 D. none of the abovearrow_forward
- The partnership of Tatum and Brook shares profits and losses in a 60:40 ratio respectively after Tatum receives a 10,000 salary and Brook receives a 15,000 salary. Prepare a schedule showing how the profit and loss should be divided, assuming the profit or loss for the year is: A. $40,000 B. $25,000 C. ($5,000) In addition, show the resulting entries to each partners capital account. Tatums capital account balance is $50,000 and Brooks is $60,000.arrow_forwardThe partnership of Tasha and Bill shares profits and losses in a 50:50 ratio, and the partners have capital balances of $45,000 each. Prepare a schedule showing how the bonus should be divided if Ashanti joins the partnership with a $60,000 investment. The partners new agreement will share profit and loss in a 1:3 ratio.arrow_forwardThandie and Marco are partners with capital balances of $60,000. They share profits and losses at 50%. Chris contributes $60,000 to the partnership for a 1/3 share. What amount should the partnership record as an individual bonus to each of the old partners? A. $10,000 B. $7,000 C. $0 D. $5,000arrow_forward
- A partnership ________. A. has one owner B. can issue stock C. pays taxes on partnership income D. can have more than one general partnerarrow_forwardArun and Margot want to admit Tammy as a third partner for their partnership. Their capital balances prior to Tammys admission are $50,000 each. Prepare a schedule showing how the bonus should be divided among the three, assuming the profit or loss agreement will be 1:3 once Tammy has been admitted and her contribution is: A. $20,000 B. $80,000 C. $50,000. In addition, show the resulting journal entries to each of the three partners capital accounts.arrow_forward
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