Tor F 1. in certain cases when distribution of profits or loss involves salary and interest allowances, some partners may receive an increase in equity and others may suffer a decrease 2. In the absence of stipulation, the share of each partner in profits or losses shall be in the same proportion to what he may have contributed, but the industrial partner may not be liable for losses. 3. The interest on partners' capital can be considered as expenses depending on the partners' agreement. 4. Interest on loans from partners is recognized as partnership income. 5. If a partnership agreement does not specify how profits or losses are to be distributed, they should be allocated based on relative capital account balances. 6. The drawing account of a partner may have a debit or credit balance. 7. To compensate for the difference in their capital contributions, partners are allowed this item. a. Capital Ratio b. Interest on Investment c. Distribution of Profit 8. On January 1, 2014, Besa, Basco Buao, and Baduel formed tge B4 Trading, a partnership with capital contributions as follows: Besa - P 150,000: Basco-P75,000: Bua-P75,000; and Baduel-P 60,000. The partnership agreement stipulates that each partner shall receive a 5% interest on capital contributed and that Besa and Bas shall receive salaries (chargeable as expenses of the business) of P 15,000 and P 9,000, respectively. The agreement further provides that Bwashall receive a minimum of P 7,500 per annum and Baduela minimum of P 18,000, which is inclusive of amounts representing interest and their respective share in partnership profits. The balance of the profits shall be distributed among the partners in the ratio of 3:3:2:2 What amount must be earned by the partnership in fiscal year 2014, before any charge for interest and partners' salaries, in order that Besa may receive an aggregate of P 37,500 including interest, salary, and share of profits. a. P 92,00 b. P 97,000 c. P 50,000 d. P 90,000 9. Partner Quito had a begging capital balance of 35,000 and male additional investments of 27,000 during the year. In the same year, Quito made drawings of 5,000 per month. The post-closing capital balance of Quito is P 72,000. What is his share in partnership profit? a. 70,000 b. P 15,000 c. P 60,000 d. P 72,000