The following Statement of Financial Position for the partnership of A, B and C were taken from the books on April 1, 2016. Liabilities A, Capital B, Capital С, Сapital Total Liab and Cap Cash 100,000 400,000 P 200,000 120,000 95,000 85,000 500,000 Other assets Total assets 500,000 The partners agreed to distribute profits as follows: Salaries to A and B of P5,000 each Interest of 5% per annum on beginning capital Bonus of 15% to A based on net income after salaries, interest and bonus Remaining profit is to be divided as 25% to A, 35% to B and 40% to C The partnership began its operations on April 1, 2016 and net income for the year ended June 30, 2016 is P69,500. Which of the following statements is correct? a. The bonus to be given to A is P9,487.50. b. The net income after salaries, interest and bonus is P50,000. C. B's total share in the net income is P21,688. d. C's share on the profit after salaries, interest and bonus is P13,750.

The following Statement of Financial Position for the partnership of A, B and C were taken from the books on April 1, 2016. Liabilities A, Capital B, Capital С, Сapital Total Liab and Cap Cash 100,000 400,000 P 200,000 120,000 95,000 85,000 500,000 Other assets Total assets 500,000 The partners agreed to distribute profits as follows: Salaries to A and B of P5,000 each Interest of 5% per annum on beginning capital Bonus of 15% to A based on net income after salaries, interest and bonus Remaining profit is to be divided as 25% to A, 35% to B and 40% to C The partnership began its operations on April 1, 2016 and net income for the year ended June 30, 2016 is P69,500. Which of the following statements is correct? a. The bonus to be given to A is P9,487.50. b. The net income after salaries, interest and bonus is P50,000. C. B's total share in the net income is P21,688. d. C's share on the profit after salaries, interest and bonus is P13,750.

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter15: Partnership Accounting

Section: Chapter Questions

Problem 1PA: The partnership of Tatum and Brook shares profits and losses in a 60:40 ratio respectively after...

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