Toys for All company was set up on July 1, 2018 with Barbie investing properties costing P320,000, but with a current fair value of P450,000. Hannah invested twice Barbie's contribution. Partners have no agreement on the division of profits and losses. The business incurred a net loss of P210,000 in 2018 but recovered to earn a net profit of P720,000 in 2019. It was further agreed that annual salaries be withdrawn by each as follows: Barbie, P80,000 and Hannah P120,000, but only if operation is profit.

Direction: 1. Distribute the 2018 loss and give the journal entry. 2. Distribute the 2019 profit and give the journal entry. 3. Prepare a statement of partners equity for each year.

3. Toys For All Company was set up on July 1, 2018 with Barbie investing properties costing P320,000 but with a current fair value of P450,000. Hannah invested twice Barbie's contribution. Partners have no agreement on the division of profits and losses. The business incurred a net loss of P210,000 in 2018 but recovered to earn a net profit of P720,000 in 2019. It was further agreed that annual salaries be withdrawn by each as follows: Barbie, P80,000 and Hannah, P120,000 but only if operation is a profit. Direction: a) Distribute the 2018 loss and give the journal entry. b) Distribute the 2019 profit and give the journal entry. c) Prepare a statement of partners' equity for each year