On January 1, 2019. Intellectual and Lovable, two seasoned sole proprietors, formed a partnership by contributing...

 

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On January 1, 2019. Intellectual and Lovable, two seasoned sole proprietors, formed a partnership by contributing P250,000 and P150.000 cash respectively. First year of operations resulted to net income of P 100,000. The capital accounts of partners show the following for the year ended December 31, 2020 Intellectual, Capital Debit Date January 1 March 30 May 10 July 25 80,000 Credit P 580,000 60,000 140.000 Credit P 420,000 120.000 100.000 Investments and withdrawals made before the middle of the month are to be considered as if made at the beginning of the month. Those made after the middle of the month will be considered as it made at the end of the month. Income summary account has a credit balance of P350,000 on December 31, 2020. Lovable, Capital Debit Date January 1 May 18 August 24 October 29 40.000 Instruction: Determine the share of each partner in partnership profit for the following independent cases: a. Intellectual and Lovable share profits and losses in the ratio 7:5, respectively. b. Interest of 10% is allowed on average capital balance and the remainder equality. c. Intelectual and Lovable shall be given monthly salaries of P9,000 and P7.500, respectively and the balance divided in the ratio of ending capital. and for the exclusive use of SCL Reproduction storing in a reeval system diebuting uploading or posting online by any ctronic mechanical photocopying, recording, or otherwise of any part of the document without the prior written person of SLU sty poblac d. Intellectual is allowed a bonus of 10% and the balance is divided based on average capital (Bonus not treated as expense). e. Partners share profits and losses under the following agreement: a. bonus of 10% of net income after bonus is given to Intellectual b. interest of 6% is given to beginning capital c. any balance divided in the ratio of 3:2 to intellectual and Lovable, respectively. 1. Partners share profits and losses under the following agreement: a. Interest of 6% is allowed on the excess of average Investment of one partner over the other b. monthly salary of P12.000 and P9,000 is given to intelectual and Lovable respectively c. bonus of 10% of net income after salaries and interests is given to intellectual d, any balance divided based on ending capital. g. Partnership agreement on their share in profits and losses contains the following: a, interest of 10% is allowed on ending capital b. bonus of 10% of net income after bonus and interests is given to intellectual. c. monthly salary of P12.500 and P10.000 is given to intelectual and Lovable, respectively d. any balance divided equally. On January 1, 2019. Intellectual and Lovable, two seasoned sole proprietors, formed a partnership by contributing P250,000 and P150.000 cash respectively. First year of operations resulted to net income of P 100,000. The capital accounts of partners show the following for the year ended December 31, 2020 Intellectual, Capital Debit Date January 1 March 30 May 10 July 25 80,000 Credit P 580,000 60,000 140.000 Credit P 420,000 120.000 100.000 Investments and withdrawals made before the middle of the month are to be considered as if made at the beginning of the month. Those made after the middle of the month will be considered as it made at the end of the month. Income summary account has a credit balance of P350,000 on December 31, 2020. Lovable, Capital Debit Date January 1 May 18 August 24 October 29 40.000 Instruction: Determine the share of each partner in partnership profit for the following independent cases: a. Intellectual and Lovable share profits and losses in the ratio 7:5, respectively. b. Interest of 10% is allowed on average capital balance and the remainder equality. c. Intelectual and Lovable shall be given monthly salaries of P9,000 and P7.500, respectively and the balance divided in the ratio of ending capital. and for the exclusive use of SCL Reproduction storing in a reeval system diebuting uploading or posting online by any ctronic mechanical photocopying, recording, or otherwise of any part of the document without the prior written person of SLU sty poblac d. Intellectual is allowed a bonus of 10% and the balance is divided based on average capital (Bonus not treated as expense). e. Partners share profits and losses under the following agreement: a. bonus of 10% of net income after bonus is given to Intellectual b. interest of 6% is given to beginning capital c. any balance divided in the ratio of 3:2 to intellectual and Lovable, respectively. 1. Partners share profits and losses under the following agreement: a. Interest of 6% is allowed on the excess of average Investment of one partner over the other b. monthly salary of P12.000 and P9,000 is given to intelectual and Lovable respectively c. bonus of 10% of net income after salaries and interests is given to intellectual d, any balance divided based on ending capital. g. Partnership agreement on their share in profits and losses contains the following: a, interest of 10% is allowed on ending capital b. bonus of 10% of net income after bonus and interests is given to intellectual. c. monthly salary of P12.500 and P10.000 is given to intelectual and Lovable, respectively d. any balance divided equally.

Answer rating: 100% (QA)

Case A Since there is a given profitsharing ratio of 75 we simply follow that ratio in determining the share of each partner Intellectual 350000 x 712 P204167 Lovable 350000 x 512 P145833 Case B Step ... View the full answer