PROBLEM: Cesario Edulan and Pamela Tao are partners of Dadiangas Partnership. The Income and Expense Summary account before the final closing shows a credit balance of P225,000 at the end of 2022.

The following were taken from their respective capital account ledgers:

Cesario Edulan

January 1 Balance P376,000

Sept. 1 Withdrawal 35,000

December 1 Investment 25,000

Pamela Tao

Jan.1 balance P340,000

Feb.1 Investment 40,000

Oct.1 withdrawal 5,000

Dec.1 Investment 20,000

REQUIRED: SHOW HOW PROFIT IS DISTRIBUTED TO PARTNERS UNDER THE FOLLOWING INDEPENDENT ASSUMPTIONS:

1. Annual salaries of P22,500 to Edulan and P15,000 to Tao; 4% interest based on beginning capital balances of each partner and remainder equally.

2. 10% interest is allowed to partner based on the ending capital balances; annual salaries of P25,000 to Edulan and P10,000 to Tao, and the balance for distribution according to the ratio of 3:2 respectively.

3. Annual salaries of P60,000 and P50,000 respectively; bonus to Edulan of 25% of profit before salaries to both partners; and the remainder is divided based on average capital ratio.