AA and BB are partners with capital accounts that had the following transactions during 2022: AA BB
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Question:
AA and BB are partners with capital accounts that had the following transactions during 2022:
AA | BB | |||
Debit | Credit | Debit | Credit | |
Beginning balance, January 1 | P270,000 | P280,000 | ||
February 28 | P80,000 | |||
March 1 | 120,000 | |||
April 30 | 160,000 | |||
June 1 | P100,000 | |||
August 1 | 140,000 | |||
September 30 | 40,000 | |||
October 31 | 40,000 |
The partnership agreement provides for the following:
- The interest of 9% is to be provided to AA
- Salaries of P4,000 is to be given to BB per quarter
- A bonus of 25% is to be given to AA based on net income after interest and salaries
- The remaining balance is to be allocated on a ratio of 40:60.
The income summary account has a credit balance of P1,050,000 before profit distribution. BB has a Drawing account amounting to P40,000 which is a withdrawal made by BB in anticipation of future profits on July 1, 2022.
How much is the share of AA in the partnership profits for 2022?
Related Book For
Introduction to Governmental and Not for Profit Accounting
ISBN: 978-0132776011
7th edition
Authors: Martin Ives, Terry K. Patton, Suesan R. Patton
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