Partnership Operation

Problem Exercise No. 2

Alfredo Lim and Joseph Estrada are partners of Maynilad Supermarket. Their respective ledger
capital balances are shown below:

Lim, Capital:
Jan. 1 P 300,000
May 1- Investment 40,000
Sept. 1- Withdrawal 60,000

Estrada, Capital
Jan. 1 P400,000
Sept. 1 Investment 50,000
Nov. 1 Withdrawak 50,000

For each of the following independent profit and loss agreement, prepare a schedule of profit
distribution:

1. Salaries are provided to Lim of P50,000 and P30,000 to Estrada. Lim receives a bonus of
5% of profit after bonus. Interest of 15% based on ending capital balances and any
remainder will be shared on the ratio 2:3. Profit for distribution was P450,000.
2. Lim receives a bonus of 20% of profit after bonus and salaries. Salaries are P60,000 to
Lim and P80,000 to Estrada. Interest of 10% based on ending capital balances and any
remainder will be based on the ratio of 4:3. Profit for distribution was P630,000.
3. Both Lim and Estrada are given an interest of 10% based on their respective average
capital balances. Salaries of P70,000 and P50,000, respectively. Estrada receives a bonus
of 10% of profit after bonus and salaries. Amy remainder is divided equally. Profit for
distribution was P520,000.