NAME: RAGMAC, MICHAELA B.

SUBJECT: BACC4 - Partnership and Corporation Accounting

ENABLING ACTIVITY #2

The partnership agreement of Kupa, Atlas, and Popol stipulated the following:

• Kupa, the managing partner, shall receive a bonus of 10% of profit

• Each partner shall receive a 5% interest on average capital investments.
• Any remaining profit or loss shall be divided equally.

The average capital balances of the partners during the year are as follows:
Kupa P50,000
Atlas P20,000
Popol P30,000

Requirement: Compute for the respective shares of the partners on the partnership profit or
loss.

Case#1: The partnership earns a profit of P120,000

KUPA ATLAS POPOL TOTAL

120,000

BONUS 12,000 12,000

INTEREST 2,500 1,000 1,500 5,000

PROFIT 34,333 34,333 34,333 103,000

48,833 35,333 35,833 120,000

Case#2: The partnership incurs a loss of P15,000

KUPA ATLAS POPOL TOTAL

15,000

INTEREST 2,500 1,000 1,500 5,000

LOSS 6,667 6,667 6,667 20,000

4,167 5,667 5,667 15,000