Reference no: EM132998246

In January 2021, Lux and Jinx agreed to produce and sell chocolate candies, and form a partnership called "Wild-Rift Partneship". Lux contributed P2,400,000 in cash to the business. Jinx contributed the building and equipment, valued at P2,200,000 and P1,400,000 respectively. The partnership had profits of P840,000 during 2021 but was less successful during 2022, when profit was only P400,000.

Problem 1. Journal entry to record the investment of both partners 'in the partnership.

Problem 2. What is the share of profit for each partner in 2021 and 2022 under each of the conditions :

a. The partners agreed to share profit equally.

b. Partners failed to agree on a profit-sharing arrangement

c. The partners agreed to share profit according to the ratio of their original investment

d. Partners agreed to share profits by allowing interest of 10% on their investments and dividing the remainder equally

e. The partners agreed to share profits by allowing salaries of P400,000 for Lux and P280,000 for Jinx, and dividing the remainder equally.

f. Partners agreed to share profits by paying salaries of P400,000 to Lux and P280,000 to Jinx allowing interest of 9% on their original investments, and dividing the remainder equally