Partnership Oprations

Problem 1 (Solutions)

A. Luz Lim & Grace Espina

Luz Lim 150,000
Grace Espina 180,000
Total Capital 330,000

Profit: P110,000

1 Luz Lim 110,000 x 15/33 50,000

Grace Espina- 110,000 x 18/33 60,000
Total 110,000

2 Profit Distribution Schedule:

Lim Espina Total
Salaries 24,000 15,000 39,000
Balance: 3:2 42,600 28,400 71,000
Total 66,600 43,400 110,000

3 Lim Espina Total

Interest 10% 15,000 18,000 33,000
Balance: equally 38,500 38,500 77,000
Total 53,500 56,500 110,000
Problem B: Kent Dequito & Jude Sauler

1 Distribution of Profit Schedule: P450,000

Dequito Sauler Total
Salaries 40,000 30,000 70,000
8% interest on beg. Capital
8% of P752,000 60,160
8% of P680,000 54,400 114,560
Balance: equally 132,720 132,720 265,440
Total 232,880 217,120 450,000

2 Distribution of {rpfit Schedule: P450,000

Dequito Sauler Total
20% interest on end Capital
20% of P732,000 146,400
20% of P710,000 142,000 288,400
Salaries 50,000 20,000 70,000
Balance: 50%; 50% 45,800 45,800 91,600
Total 242,200 207,800 450,000

3 Distribution of Profit Schedule:

Dequitu Sauler Total
Salaries 120,000 100,000 220,000
25% of P450,000 112,500 112,500
Dequito:
P117,500 x 739/1481 58,631
Sauler:
P117,500 x 742/1481 58,869 117,500
Total 291,131 158,869 450,000

Computation of Average capital

Dequito:
752,000 x 9 mos. = 6,768,000
682.000 x 2 mos. 1,364,000
732,000 x 1 mo. 732,000
Total 8,864,000/12 mos. - P738,700

Sauler:
680,000 x 2 1,360,000
760,000 x 8 6,080,000
750,000 x 1 750,000
710,000 x 1 710,000
Total 8,900,000/12 mos. - P741,700