PROBLEM 4: MULTIPLE CHOICE

1. The partners share in partnership profit or losses in accordance with their partnership agreement. If there
is no stipulation on how the partners should share in the profits or losses of the partnership.
A.They should share equally.
B. They should let one of the partners decide unilarelly on how the profits should be divided among the partners.
C. Their respective shares would be in proportion to their contributions.
D. They Should not share at all but donate their profits to the world.

2
A B Total
Amount being allocated: 100,000
Allocation:
1. Salaries 80,000 40,000 120,000
3. Allocation of remaining loss
(100,000 -120,000)=-20,000
(-20,000x50%) -10,000 -10,000 -20,000
As allocated 70,000 30,000 100,000

How much is the share of B?

A. 70,000 C. 48,000
B. 30,000 D. 52,000

3
A B Total
Amount being allocated: -20,000
Allocation:
1. Salaries 10,000 40,000 50,000
3. Allocation of remaining loss
(-20,000-50,000)=-70,000
(-70,000x60%); (-70,000x40%) -42,000 -28,000 -180,000
As allocated -32,000 12,000 -20,000
By what amount did B's capital acount change?
A. Increased by 12,000 C. Increased by 32,000
B. Decreased by 12,000 D. Decreased by 32,000

4
Mos.
Balance Outstanding/ Weighted average
total mos. in a year
Beginning balance 60,000 12/12 60,000
Weighted average capital balance 60,000
Multiply by: Interest rate 12%
Interest on weighted average capital balance 7,200

A B Total
Amount being allocated: 200,000
Allocation:
1. Salaries 10,000 40,000 50,000
2. Bonus (a) 15,000 - 15,000
3. Interest on weighted ave. capital 7,200 7,200
4. Allocation of remaining profit
(200k-50k-15k-7,200K)= 127,800
(127,800x60%);(127,800x40%) 76,680 51,120 127,800
As allocated 101,680 98,320 200,000

The bonus is computed as follows:

Profit before salaries and bonus 200,000
Salaries 50,000
Profit after salaries but before deduction of bonus 150,000
Multiply by: Bonus percentage 10%
Bonus 15,000

How much is the share of A in the profit?

A. 101,680 C. 110,820
B. 98,320 D. 96,720