Reference no: EM132568308

Question 1. AAA, BBB and CCC are partners with average capital balances during 2008 of P120,000, P60,000 and P40,000, respectively. Partners receive 10% interest on their average capital balances. After deducting salaries or P30,000 to AAA and P20,000 to CCC, the residual profit or loss is divided equally. In 2009 the partnership sustained a P33,000 loss before interest and salaries to partners. By what amount should AAA's account change?

a. P7,000 increase c. P35,000 decrease

b. P11,000 decrease d. P42,000 increase

Question 2. The partnership agreement of AAA, BBB and CCC provides for the year-end allocation of net income in the following order:

1. First, AAA is to receive 10% of net income up to P100,000 and 20% over P100,000
2. Second, BBB and CCC each are to receive 5% of the remaining income over P150,000
3. The balance of income is to be allocated equally among the three partners

The partnership's 2009 net income was P250,000 before any allocations to partners. What amount should be allocated to AAA?

a. P101,000 c. P108,000

b. P103,000 d. P110,000

Question 3. The Articles of Partnership of Adam and Eve the following provisions were stipulated:

1. Annual salary of P60,000 each
2. Bonus to Adam of 20% of the net income after partner's salaries and bonus, the bonus being treated as an expense.
3. Balance to be divided equally.

The partnership reported a net income of P360,000 after partners' salaries but before bonus. How much is the share of Eve in the profit?

a. P 60,000

b. 90,000

c. 150,000

d. 210,000