Problem 3. The A,B,C partnership agreement specifies that partnership net income be allocated as follows:

A B C

Salary allowance P30,000 P10,000 P40,000 Interest on average capital balance 10% 10% 10% Remainder 40% 40% 20%

The average capital balances for the current year were P50,000 for A, P30,000 for B, and P20,000 for C.

a. Assuming a current year net income of P150,000, what amount should be allocated to each partner?

b. Assuming a current year net income of P50,000, what amount should be allocated to each partner?