On Jan. 1, 2020, the Mones, Pitular and Tuazon Partnership was formed with initial investments by the partners as follows: P2,000,000 1,000,000 1,000,000 Mones Pitular Tuazon According to the partnership agreement, profit or loss is to be divided among the partners as follows: 1. Salaries of P120,000 for Mones, P60,000 for Pitular and P60,000 for Tuazon. 2. Interest at 5% on the original capital balances. 3. The remainder to be divided among Mones, Pitular, and Tuazon in a ratio of 4:1:1, respectively. The partnership reported profit of P350,000 for the year ended Dec. 31, 2020. Required: Determine the partners' share in the profit under each of the following independent situations: 1. Partner's salaries and interest on capital balances should be fully allocated and any deficiency between these allocations and profit is to be divided among Mones, Pitular, and Tuazon in the ratio 4:1:1, respectively. 2. Partner's salaries and interest on capital balances should be made only to the extent that the profit can provide.

On Jan. 1, 2020, the Mones, Pitular and Tuazon Partnership was formed with initial investments by the partners as follows: P2,000,000 1,000,000 1,000,000 Mones Pitular Tuazon According to the partnership agreement, profit or loss is to be divided among the partners as follows: 1. Salaries of P120,000 for Mones, P60,000 for Pitular and P60,000 for Tuazon. 2. Interest at 5% on the original capital balances. 3. The remainder to be divided among Mones, Pitular, and Tuazon in a ratio of 4:1:1, respectively. The partnership reported profit of P350,000 for the year ended Dec. 31, 2020. Required: Determine the partners' share in the profit under each of the following independent situations: 1. Partner's salaries and interest on capital balances should be fully allocated and any deficiency between these allocations and profit is to be divided among Mones, Pitular, and Tuazon in the ratio 4:1:1, respectively. 2. Partner's salaries and interest on capital balances should be made only to the extent that the profit can provide.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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