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PROBLEM 2 Will, River, and Ralph are partners whose average capital balances are P189,860, P239,360 and P280,910, respectively. The agreement is that each partner is to receive 10% interest on their average capital balances, salaries of P74,980 to Will and P113,750 to Ralph, and any remainder to be divided equally. However, during the year, the partnership incurred a net loss of P395,211 before the interest and salaries to partners. 1. What is the change in the capital balances of Will and Ralph? Will Ralph a) P141,841 decrease P71,013 increase b) P194,382 decrease P80,632 increase c) P124,352 decrease P76,477 decrease d) P188,730 decrease P93,966 decrease