Instructions: 1. Determine the profit or loss of the partnership. Income 2. Prepare the schedule showing the distribution of partnership profit or loss. 3. Determine the ending capital of the balances of the partners.

Problem 3-6 (Computation of Profit; Division of Profit; Ending Capital Balances) Brenda and Brosas entered into a partnership on May 1, 2014, investing P625,000 and p375.000, respectively. It was agreed that Brenda, the managing partner, is to receive a salary of P150.000 per year and 10% of profit after adjustment for the salary, any remaining profit is to be divided in the ratio of original capital. On December 31, 2014. account balances are as follows: Debit Credit Accounts Payable 300,000 Accounts Receivable 335,000 Brenda, Capital 625.000 Brenda, Drawing 100,000 Brosas, Capital 375,000 Brosas, Drawing 150,000 Cash 710,000 Furniture and Fixtures 225,000 Operating Expenses 300,000 Purchases 980,000 Sales 1,525,000 Sales Returns and Allowances 25,000 . urinership 0 Additional information as of December 31, 2014: 2 . Inventories: merchandise, P305,000; supplies, P12,500 3 . Prepaid taxes and insurance, P5,000. 4. Accrued expenses, P17.500. Depreciation on furniture and fixtures, 20% per year. Instructions: Determine the profit or loss of the partnership. Income tax rate is 30% 2. Prepare a schedule showing the distribution of partnership profit or loss. 3. Determine the ending capital balances of the partners