Question
Problem 3. The A,B,C partnership agreement specifies that partnership net income be allocated as follows: A B C Salary allowance P30,000 P10,000 P40,000 Interest on
Problem 3. The A,B,C partnership agreement specifies that partnership net income be allocated as follows:
A B C
Salary allowance P30,000 P10,000 P40,000 Interest on average capital balance 10% 10% 10% Remainder 40% 40% 20%
The average capital balances for the current year were P50,000 for A, P30,000 for B, and P20,000 for C.
a. Assuming a current year net income of P150,000, what amount should be allocated to each partner?
b. Assuming a current year net income of P50,000, what amount should be allocated to each partner?
Problem 3. The A,B,C partnership agreement specifies that partnership net income be allocated as follows:
A B C
Salary allowance P30,000 P10,000 P40,000 Interest on average capital balance 10% 10% 10% Remainder 40% 40% 20%
The average capital balances for the current year were P50,000 for A, P30,000 for B, and P20,000 for C.
a. Assuming a current year net income of P150,000, what amount should be allocated to each partner?
b. Assuming a current year net income of P50,000, what amount should be allocated to each partner?
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Intermediate Accounting
Authors: Earl K. Stice, James D. Stice
19th edition
1133957919, 978-1285632988, 1285632982, 978-0357691229, 978-1133957911
