DD and EE was organized and began operations of March 1, 2019. On that date, DD

invested P75,000 and EE invested land and building with current fair value of P40,000 and

P50,000, respectively. EE also invested P30,000 in the partnership on November 1, 2019

because of its shortage of cash. The partnership contract includes the following

remuneration plan:

DDEE

Annual SalaryP9,000P12,000

Annual interest on average capital account balance10%10%

Remainder60%40%

The annual salary was to be withdrawn by each partner in 12 monthly installments. During

fiscal year ended, February 28, 2020, DD and EE had net sales of P25,000, cost of goods

sold of P140,000 and total operating expenses of P50,000 (excluding partners' salaries and

interest on average capital account balances). Each partner made monthly cash drawings

in accordance with partnership contract.

Determine the share of partner DD in the net income:

A. P29,400

B. P33,000

C. P36,000

D. P23,400

The capital balance of each partner on March 1, 2020 should be:

A. DD P95,400; EE P138,600

B. DD P66,000; EE P82,000

C. DD P108,000; EE P147,000

D. DD P99,000; EE P135,000