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    On A Ratio Based Average Capital Balances

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    Joana Trinidad
    The document provides information about the capital balances and profit/loss sharing arrangements for three partnerships: 1) XYZ Partnership, where partner X receives 10% of the first P100,000 of net income and 20% of amounts over P150,000, and the remaining profit is split equally among partners. 2) Tamayo, Banson, and Vidal partnership, where profits and losses are shared equally after salaries, interest on capital balances, and additional capital contributions/withdrawals are considered. 3) Mariano and Lucas partnership, where Mariano receives a salary and 10% bonus on profits, and the remaining profit is split based on the original capital contribution ratio.

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    On A Ratio Based Average Capital Balances

    Uploaded by

    Joana Trinidad
    46 views2 pages
    The document provides information about the capital balances and profit/loss sharing arrangements for three partnerships: 1) XYZ Partnership, where partner X receives 10% of the first P100,000 of net income and 20% of amounts over P150,000, and the remaining profit is split equally among partners. 2) Tamayo, Banson, and Vidal partnership, where profits and losses are shared equally after salaries, interest on capital balances, and additional capital contributions/withdrawals are considered. 3) Mariano and Lucas partnership, where Mariano receives a salary and 10% bonus on profits, and the remaining profit is split based on the original capital contribution ratio.

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    The document provides information about the capital balances and profit/loss sharing arrangements for three partnerships: 1) XYZ Partnership, where partner X receives 10% of the first P100,000 of net income and 20% of amounts over P150,000, and the remaining profit is split equally among partners. 2) Tamayo, Banson, and Vidal partnership, where profits and losses are shared equally after salaries, interest on capital balances, and additional capital contributions/withdrawals are considered. 3) Mariano and Lucas partnership, where Mariano receives a salary and 10% bonus on profits, and the remaining profit is split based on the original capital contribution ratio.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    46 views2 pages

    On A Ratio Based Average Capital Balances

    Uploaded by

    Joana Trinidad
    The document provides information about the capital balances and profit/loss sharing arrangements for three partnerships: 1) XYZ Partnership, where partner X receives 10% of the first P100,000 of net income and 20% of amounts over P150,000, and the remaining profit is split equally among partners. 2) Tamayo, Banson, and Vidal partnership, where profits and losses are shared equally after salaries, interest on capital balances, and additional capital contributions/withdrawals are considered. 3) Mariano and Lucas partnership, where Mariano receives a salary and 10% bonus on profits, and the remaining profit is split based on the original capital contribution ratio.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    of 2

    6.

    The most appropriate basis for dividing partnership net income when the partners do not plan
    to take an active role in daily operation is
    On a ratio based average capital balances

    7. XYZ Partnership provided for the following in the distribution of profits and losses:
    First: X is to receive 10% of net income up to P100,000 and 20% of the amount in
    excess thereof.
    Then: Y and Z are each to receive a 5% of the remaining income in excess of P150,000
    after X’s share.
    Lastly: The balance is to be distributed equally to the three partners.

    ● If the partnership income is P250,000, what is the total share of X?


    P108,000

    8. Tamayo, Banson and Vidal, a partnership formed on january 1, 2018, had the following initial
    investments.

    Tamayo 100,000

    Banson 150,000

    Vidal 225,000

    The partnership agreement profits and losses are to be shared equally by the partners after
    consideration is made for the following:
    a. Salaries allowed to partners: P60,000 for Tamayo; P48,000 for Banson and P36,000 for
    Vidal.
    b. Average partner’s capital balances during the year shall be allowed 10% interest.

    Additional information:
    A. On June 30,2018, Tamayo invested an additional P60,000.
    B. Vidal withrew P70,000 from the partnership on September 30, 2018.
    C. Share on the remaining profit was P3,000 for each partner.

    ● The average capital of Vidal is ________.


    207500

    ● The partnership net profit for 2018 before salaries, interest and partner’s share on
    the remainder is _______.
    201750

    ● The average capital of Tamayo is ________.


    130000
    ● Interest on average capital balances of the partners totals
    48750

    ● Total Partnership Capital


    666750

    9. Mariano and Lucas entered into partnership on March 1, 2018, investing P125,000 and
    P75,000 respectively. It was agreed that Mariano, the managing partner, was to receive a salary
    of P12,000 per year and also 10% bonus on the profit after adjustment for the salary, the
    balance of the profit was to be divided in the ratio of the original capital. On December 31, 2018,
    account balances are as follows:

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