Problem 3-3 ( Division of Profit and Loss; Interest on Average Capital, Salaries to Partners, and Bonus to the Managing Partner)The average of BBB Partnership are Bilbao, Bertol, and Borja. During the current year, their average capital balances are as follows. Bilbao- 560,000 Bertol- 400,000 Borja - 240,000The partnership agreement provides that partners shall receive: 1. Annual allowance of 6% of their average capital balances.2. Salary allowances as follows: Bilbao- none; Bertol -96,000; Borja - 80,000.3. Bertol, who manages the business, is to receive a bonus of 25% of profit in excess of 144,000 after partners interest and salary allowances. 4. Residual profit will be divided in the ratio of 5:3:2. Problem 3-5 The profit and loss agreement specifies that:1. Interest of 8% is allowed on capital balances. Capital balances are 500,000 and 300,000 respectively, while withdrawals debited to drawing accounts during the year are 60,000 and 100,000 respectively.2. Salary allowances to Balte and Bala are 120,000 and 80,000, respectively. 3. A bonus is given to Balte equal to 20% of profit without regard to interest and salary.4. Remaining profit and losses are to be divided in the ratio of capital balances. Instructions: 1. Prepare the schedule showing the distribution of profit to the partners.2. Prepare the journal entries required to distribute profit and close the books of the partnership.3. Prepare the statement of change's in partner's equity.

Instructions: Prepare separate schedules showing how profit or loss will be divided among the three partners under cach of the following independent cases. The amour given in each case is the profit or loss for the year that is available for distribution partners. 1. P 50,000 loss 2. P120,000 profit 3. P500,000 profit Problem 3-4 (Division of Profit and Loss; Interest on Average Capital, Salaries and Bonus to Partners) Basa, Benito, Beltran and Bagnes own a publishing company which they operate as ; partnership. The partnership agreement includes the following: Basa receives a salary of P400,000 and a bonus of 3% of income after all bonuses . Benito receives a salary of P200,000 and a bonus of 2% of income after all bonuses; All partners are to receive a 10% interest on their average capital balances. The average capital balances are as follows: Basa - P1,000,000; Benito - 900,000. Beltran - P400,000; Bagnes - P940,000; . Any remaining profits are to be divided equally among the partners. Instructions: 1. Determine how a profit of P2, 100,000 would be allocated among the partners. 2. Determine how a loss of P800,000 would be allocated among the partners. 3. Determine how a profit of P800,000 would be allocated among the partner assuming the following priority system: Income should be allocated by first giving priority to interest on invested capital, then bonuses, then salary, and then according to the profit and loss percentages. Problem 3-5 (Division of Profit; Interest on Capital, Salaries to Partners, and Bonus a Partner) The condensed income statement of Balte and Bala as of December-31, 2014 follows: Sales P4,800,000 Cost of sales 2,100,000 Gross profit P2,700,000 Operating expenses 1,000,000 Profit before tax P1,700,000 Income tax (P1, 700,000 x 30%) 510,000 Profit P1,190,000