What amount must be earned by the partnership

Assignment Help Financial Accounting

Reference no: EM132846787

Questions -

Q1. FIESTA, GUNSHOT, and HUSSEY form a partnership and agree to maintain average investments of P2,500,000, P1,250,000 and P1,250,000, respectively. Interest on the excess or deficiency in a capital contribution is to be computed at 6% per annum. After the interest allowances, FIESTA, GUNSHOT, and HUSSSEY are to share any balance in the ratio of 5:3:2. Average amounts invested during the first six months were as follows: FIESTA, P3,000,000; GUNSHOT, P1,375,000; and HUSSET, P1,000,000. A loss from operations of P62,500 was incurred for the first six months. How is this loss distributed among the partners FIESTA, GUNSHOT, and HUSSEY?

Q2. Kristel, Sophia and Wilchen formed a partnership on January 1, 2020. Each contributed P144,000. Salaries were to be allowed as follows:

KK P36,000

SS 36,000

WW 54,000

a. Drawings were equal to salaries and be taken out evenly throughout the year.

b. With sufficient partnership net income, Kristel and Sophia 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).

c. Remaining profits were to be divided as follows: 30% for Kristel, 30% for Sophia, and 40% for Wilchen.

d. For the year, partnership total comprehensive income was P144,000.

What are the capital balances of the partners on December 31, 2020?

Q3. AZE, BEE and CRI are partners in the accounting firm. Their capital account balances at year-end were: AZE, P90,000; BEE, P110,000; CRI, P50,000. They share profits and losses in a 4:4:2 ratio, after the following special terms:

a. Partner CRI is to receive a bonus of 10% of the net income after bonus.

b. Interest of 10% shall be paid on that portion of a partner's capital in excess of P100,000.

c. Salaries of P10,000 and P12,000 shall be paid to partners AZE and CRI, respectively.

Assuming a net income of P44,000 for the year, the total profit share of partner CRI would be:

Q4. KUZ, LONZO, and MIC are partners with average capital balances during 2013 of P472,500, P238,650, and P162,350, respectively. The partners receive 10% interest on their average capital balances; after deducting salaries of P122, 325 to KUZ and P82,625 to MIC, the residual profits or loss is divided equally.

In 2013, the partnership had a net loss of P125,624 before the interest and salaries to partners.

By what amount should KUZ'S and MIC'S capital account change?

Q5. 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.

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?

Reference no: EM132846787

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