Question: A, B and C formed a Joint Operation. The contractual arrangement provides that A is to manage the joint operation and is to receive a

A, B and C formed a Joint Operation. The contractual arrangement provides that A is to manage the joint operation and is to receive a bonus of 20% of the profit after deduction of the bonus as an expense of the joint operation. The net profit after the bonus, has been agreed to be divided as follows: A, 30% B, 50% C, 20%. After three months, the Joint Operation is terminated. The trial balance prepared by A show the following balances:

DR CR

Joint Operation P16,200

B, Capital P900

C, Capital P 3,600

The joint operation has still some unsold merchandise worth P4,500. A agreed to purchase such at cost. The bonus of A has not yet been taken up.

What is the total income earned by A? Before the cash settlement is made, the balance of the investment in Joint Operation account in the books of B and C are:

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