Reference no: EM133179439

Questions -

Q1. L, M and N form a partnership on January 01, 2021, each partner investing P25,000. On August 01, 2021, L was advanced P10,000 by the firm. On September 01, 2021, M made a loan to the firm of P20,000. Interest is to be charged on advances to partners and credited on loans by partners at the rate of 6%. Business is unsatisfactory and the partners decide to liquidate. Nancy is allowed special compensation of P2,500 for managing the sale of assets and settlement with creditors. On December 31, 2021, all assets were sold, outside creditors were paid and cash of P35,000 is distributed to the partners. All partners are personally solvent. The amount of total loss distributed to the partners is?

Q2. Hybrid is trying to decide whether to accept a bonus of 25% of net income after salaries and bonus or a salary of P97,500 plus a bonus of 10% of net income after salaries and bonus as a means of allocating profit among the partners. Salaries traceable to the other partners are estimated to be P450,000. What amount of income would be necessary so that Hybrid would consider the choices to be equal?