Solution-What amount must be earned by the partnership

What amount must be earned by the partnership

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Reference no: EM132821151

On January 1, 2020, A, B, C and D formed ABAKADA Trading Co., a partnership, with capital contributions as follows: A, P50,000; B, P25,000; C, P25,000; and D, P20,000. The partnership contract provided that each partner shall receive a 5% interest on contributed capital, and that A and B shall receive salaries of P5,000 and P3,000, respectively. The contract also provided that C shall receive a minimum of P2,500 per annum, and D a minimum of P6,000 per annum, which is inclusive of amounts representing interest and share of remaining profits. The balance of the profits shall be distributed to A, B, C, and D in a 3:3:2:2 ratio.

Problem 1: What amount must be earned by the partnership, before any charge for interest and salaries, so that A may receive an aggregate of P12,500 including interest, salary and share of profits?

a) P16,667

b) P30,667

c) P30,000

d) P32,333

Reference no: EM132821151

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What amount must be earned by the partnership

Reference no: EM132821151

Reference no: EM132821151

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