Exercise 3-5. Distribution of net income by providing salaries, interest and bonus The beginning capital contributions of the partners in the newly formed partnership are as follows: Clara, P250,000; Mara, P150,000; and Angela, P200,000. In its first nine months of operation, the partnership of Clara, Mara and Angela made a net income of P290,000, before providing for 20% annual interest on beginning capital balances and monthly salary allowance of P10,000, P5,000, and P2,500, respectively. Mara is entitled to a 25% bonus on net income after interest and salaries. Any remainder will be shared by the partners in the ratio of 5:3:2. Required: Compute for the share of Clara, Mara and Angela in the partnership profits.

Exercise 3-5. Distribution of net income by providing salaries, interest and bonus The beginning capital contributions of the partners in the newly formed partnership are as follows: Clara, P250,000; Mara, P150,000; and Angela, P200,000. In its first nine months of operation, the partnership of Clara, Mara and Angela made a net income of P290,000, before providing for 20% annual interest on beginning capital balances and monthly salary allowance of P10,000, P5,000, and P2,500, respectively. Mara is entitled to a 25% bonus on net income after interest and salaries. Any remainder will be shared by the partners in the ratio of 5:3:2. Required: Compute for the share of Clara, Mara and Angela in the partnership profits.

College Accounting, Chapters 1-27

23rd Edition

ISBN:9781337794756

Author:HEINTZ, James A.

Publisher:HEINTZ, James A.

Chapter19: Accounting For Partnerships

Section: Chapter Questions

Problem 3SEB

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