Question
AA and BB are partners with capital accounts that had the following transactions during 2022: AA BB Debit Credit Debit Credit Beginning balance, January 1
AA and BB are partners with capital accounts that had the following transactions during 2022:
AA | BB | |||
Debit | Credit | Debit | Credit | |
Beginning balance, January 1 | P270,000 | P280,000 | ||
February 28 | P80,000 | |||
March 1 | 120,000 | |||
April 30 | 160,000 | |||
June 1 | P100,000 | |||
August 1 | 140,000 | |||
September 30 | 40,000 | |||
October 31 | 40,000 |
The partnership agreement provides for the following:
- The interest of 9% is to be provided to AA
- Salaries of P4,000 is to be given to BB per quarter
- A bonus of 25% is to be given to AA based on net income after interest and salaries
- The remaining balance is to be allocated on a ratio of 40:60.
The income summary account has a credit balance of P1,050,000 before profit distribution. BB has a Drawing account amounting to P40,000 which is a withdrawal made by BB in anticipation of future profits on July 1, 2022.
How much is the share of AA in the partnership profits for 2022?
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