Problem 1 - IGGY and SWAGGY share profits and losses equally after salary and interest allowances. IGGY and SWAGGY receive salary allowances of P 40,000 and P 60,000, respectively, and both partners receive 10% interest on their average capital balances. Average capital balances are calculated at the beginning of each month, regardless of when additional capital contributions or permanent withdrawals are made subsequently within the month. Partners' drawings of P 3,000 per month are not used in determining the average capital balances. Total net income for 2020 is P 240,000

January 1 Capital Balances 200,000(Iggy) 240,000(Swaggy)

Yearly drawings (P 3,000 per month) 36,000(Iggy) 36,000(Swaggy)

Permanent withdrawals of capital:

June 3 24,000(Iggy)

May 2 30,000(Swaggy)

Additional investments of capital:

July 3 80,000(Iggy)

October 2 100,000(Swaggy)

REQUIRED:

What is the weighted-average capital for IGGY and SWAGGY in 2020?

If the average capital for IGGY and SWAGGY from the above information is P 224,000 and P 238,000 respectively, what will be the total amount of profit allocated to salary and interest distributions?

If the average capital balances for IGGY and SWAGGY are P 200,000 and P 240,000, what will be the total partnership profit allocations be for IGGY and SWAGGY in 2020?