PROFITDISTRIBUTION

ABCpartnershippostedanetincomebeforetaxofP1,200,000.Thepartnersagreed on the following:

1.Monthlysalarieswillbegivento:A - P10,000;B- P6,000;C-P8,000

2.Interestof6%per annumwill becreditedtoeachofthepartnersweightedaveragecapital

3.PartnerB will begivena bonusof10%ofnet income,aftersalaries, interestand bonus.

4.Remainingprofitwill be distributedbasedontheirsimpleaveragecapitalbalance.

5.Itwasalsoagreedthat temporarywithdrawalswill notbeconsideredasdeduction fromtheir capitalprovidedthatthesearesettledwithintheyear. Anyunsettledtemporarywithdrawalwill betreatedascapitalwithdrawalfromthedateofthe actualwithdrawal. Advancewithdrawalsfor salariesshall likewise not considered ascapitalwithdrawalsbut will be deductedfromtheirfinaldistributionofprofit

Additionalinformation:

a.Jan 1, 2019capitalbalancesofthethreepartnersareasfollows:A - P200,000;B - P300,000;C-P450,000

b.OnFebruary15, 2019,Amadeanadditional investmentofP40,000.Likewiseonthe same

date,B madea temporarywithdrawalofP30,000.

c.OnJune1,2019,C madeanadditionalinvestmentofP10,000.

d.On Sept 30, 2019, A, madeatemporarywithdrawalofP20,000, and on the same date, B partiallyreturnamount of P10,000 from histemporarywithdrawal on Feb 15.and according to him,hewill not be able tosettletheremainingbalance within the year

e.OnNovember1, 2019,partnersmadeanadvancedwithdrawalsfortheirsalariesasfollows :A-P60,000 ;B-P80,000; C- P40,000

Required:1) ComputeforthedistributionofprofitofP1,200,000.

2)Howmuchwill eachpartnerreceivedafterdeductingtheadvancedsalaries

3)Howmuchwill beB'ssharein the netprofit,ifhis bonusisbased onnet profit,

aftersalaries, interest, bonusandtax.Assume a tax rate of 30%

4)Assumethatthesalariesofthepartnersaretreatedandrecordedaspartofthepartnership's operatingexpense.Howmuchwill beshareofeach partner'sin theprofit.

NOTE:Plstreatthequestionsindependentlyfromeachother.