Partner X and Partner Y share profits and losses equally. Partner X and Partner Y receive salary allowances of Php20,000 and Php30,000, respectively, and both partners receive 10% interest on their average capital balances. Total net income for 2021 is Php520,000.
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.
Partner X and Partner Y share
If the average capital of Partner X and Partner Y is Php110,000 and Php90,000, what will be the final profit allocations for Partner X in 2021?
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