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Problem Exercises
Problem A.
Luz Lm and Grace Espina formed a partnership by investing P150,000 and P180,000,
respectively. At the end of the year, the partnership has realized a profit of P110,000.
Required:
1. The partnership contract is silent about the profit and loss distribution.
2. Salaries of P24,000 and P15,000, respectively and remainder on a 3:2 basis.
3. Interest of 10% based on original investment and remainder equally.
Problem B.
Kent Dequito and Jude Sauler are partners of Cebu Vintage. The income summary account
before final closing shows a credit balance of P450,000 at the end of the year.
The following were taken from ther respective capital account ledgers:
Kent Dequito
Jan. 1, Balance - P752,000
Oct. 1 Withdrawal 70,000
Dec. 1 Investment 50,000
Jude Sauler
Jan. 1 Balance P680,000
March 1 Investment 80,000
Nov. 1 Withdrawal 10,000
Dec. 1 Withdrawal 40,000
Required:
1. Annual salaries of P40,000 and P30,000, 8% interest based on beginning capital balance
and remainders equally.
2. 20% interest to partners based on the ending capital balance, annual salaries to each
partner, P50,000 and P20,000, respectively, and balance for distribution according to the
ratio of 50%-50%.
3. Annual salaries of P120,000 and P100,000, bonus to Dequito of 25% of profit before
salaries to both, remainder is divided based on average capital ratio.