Problem 3-2 ( Division of profits under various assumptions) Banal and Burgos formed a partnership on January 1,2014. The changes in their respective capital balances during the year ended December 31,2014 are presented. During the year, the partnership earned a profit of 350,000.

Bernal, Capital 60,000 1/1 360,000 Burgos, Capital 10/31 6/30 5/31 100,000 80,000 1/1 440,000 10/31 140,000 Instructions: Prepare the entry to record the allocation of the partnership profit to individual capital accounts under each of the following assumptions: 1 . Each partner receives 8% interest on beginning-of-the-year capital balances and the remainder is divided between Bernal and Burgos in the ratio of 3:1, respectively. 2. Bernal and Burgos are given annual salaries of P70,000 and P130,000, respectively, 12% interest on the end-of-year capital balances, and the remainder is divided equally. 3. Bernal and Burgos are given salaries of P45,000 and P85,000, respectively, 12% interest on average capital balances, and the remainder divided in the ratio of 3:1. 4. Bernal and Burgos are given salaries of P50,000 and P100,000, respectively, 10% interest on average capital balances, and the remainder divided 40% to Bernal and 60% to Burgos. 5. Each partner receives 8% interest on beginning-of-the-year capital balances and a salary of P50,000, Bernal receives a bonus of 10% of profit after deducting interest and salaries, and the remainder is divided in the ratio of 2:3