Reference no: EM133003564
Arvin Jumawan and cedrick are partners of Zediski Company, The Income and Expense summary account befoe final closing shows a credit balance of P250,000 at the end of the final year.
The following were taken from the respective capital account ledgers of Jumawan and Cedrick
Arvin Jumawan Cedrick
Jan 1 balance P120,000 Jan 1 Balance P150,000
Apt 1 Withdrawal 18,000 Mar. 1 Investment 20,000
Sep 1 Investment 14,000 Aug 1 Withdrawal 25,000
Problem 1: Compute how profit is distributed to partners (show supporting schedule of profit distribution) under the following separate assumption:
a. 10% interest based on beginning capital is provided and the remaining amount is distributed based on ending capital balances.
b. 20% interest is allowed to partners and the remaining amount is distributed based on an arbitrary ratio 4:2
c. 12% interest is provided for based on the average capital balances bonus to jurnawan of 20% of profit before salaries but after bonus, salaries to each of the partner in the amount of P20,000 and P15,000 respectively and the reminder equally divided.
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