1.

The partnership of DD and BB was formed and commenced operations on March 1,20x5, with DD contributing
30,000 cash and BB investing cash of 10,000 and equipment with an agreed upon valuation of 20,000. On July 1,
20x5, BB invested an additional 10,000 in the partnership, DD made a capital withdrawal of 4,000 on May 2,
20x5 but reinvested the 4,000 on October 1, 20x5. During 20x5, DD withdrew 800 per month and BB, the
managing partner, withdrew 1,000 per month. These drawings were charged to salary expense. A pre-closing
trial balance taken at December 31,20x5 is as follows:
Debit Credit
Cash 9,000
Receivable-net 15,000
Equipment-net 50,000
Other assets. 19,000
Liabilities 17,000
DD capital 30,000
BB capital 40,000
Service revenue 50,000
Supplies expense 17,000
Utilities expense 4,000
Salaries to partners 18,000
Other miscellaneous expenses 5,000
Total 137,000 137,000

Compute for the share of DD and BB in the partnership net income assuming monthly salary allowances 800 and
1,000 for DD and BB, respectively; interest allowance at a 12% annual rate on average capital balances; and
remaining profits allocated equally.

2. On January 2, 20x5, BB and PP formed a partnership.BB contributed capital of 175,000.00 and PP, 25,000.00.
They agreed to share profits and losses 80% and 20%, respectively. PP is the general manager and works in the
partnership full time and is given a salary of P5,000.00 a month; an interest of 5% of the beginning capital (of
both partner) and a bonus of 15% of net income before the salary, interest and the bonus.
The profit and loss statement of the partnership for the year ended December 31, 20x5 is as follows:
Net Sales 875,000
Cost of goods sold (700,000)
Gross profit 175,000
Expenses (including the salary, interest and the bonus) (143,000)
Net income 32,000
Amount of bonus to PP in 20x5 __________________

3. XX, YY and ZZ formed a partnership on January 1,20x5. Each contributed 120,000. Salaries were to be
allocated as follows:
XX YY ZZ
30,000 30,000 45,000
Drawings were equal to salaries and be taken out evenly throughout the year. With sufficient partnership net
income, XX and YY could split a bonus equal to 25 percent of partnership net income after salaries and bonus (in
no event could the bonus go below zero).
Remaining profits were to be split as follows: 30% for XX; 30% for YY, and 40% for ZZ. For the year, partnership
net income was 120,000.
Compute the ending capital for each partner:

4. A, B, and C are partners in an accounting firm: Their capital account balances at year-end were A 90,000; B
110,000 and C 50,000. They share profits and losses on a 4:4:2 ratio, after the following special terms:
1. Partner C is to receive a bonus of 10% of net income after the bonus:
2. Interests of 10% shall be paid on that portion of a partner's capital in excess of 100,000.
3. Salaries of 10,000 and 12,000 shall be paid to partners A & C respectively.
Assuming a net income of 44,000 for the year, the total profit share of Partners were: A ______ B ______C
_____