PROBLEM 1-20

The following balance sheet for the Partnership of A, B, and C were taken from the books on July 1, 2019:

ASSETS

Cash 40,000

Other Assets 360,000

TOTAL 400,000

Liabilities and Capital

Liabilities 100,000

A Capital 74,000

B Capital 130,000

C Capital 96,000

TOTAL

400,000

The partners agreed to distribute the profits as follows:

a.Annual salaries to A and B of P3,000 each.

b.Allow interest of 6% on beginning capital.

c.Allow a bonus of 10% to B, the bonus to be treated as an expense after salaries and interest.

d.Remaining, 40% to A, 40% to B, and 20% to C.

Required:

1.If the net income of the partnership was P122,000 during the six-month period ending December 32, 2019, the total share of B in the net income is:

2.If C receives as his hare of net income P42,880 for the six-month period ending December 31, 2019, the total net income realized by the partnership for the same period before salaries, interest and bonus was: