Reference no: EM132620919
Problem 1: CC, DD, and EE, doctors, agree to form a partnership and to share profits in the ratio of 5:3:2. They also agreed that EE is to be allowed a salary of P 14,000, and that DD is to be guaranteed P 10,500 as his share of the profits. During the first year of operation, income from fees are P 90,000, while expenses total P 48,000. What amount of net income should be credited to each partners' capital account?
Problem 2: LL, MM, and PP are partners with capitals of P 40,000, P 25,000, and P 15,000 respectively. The partnership agreement provides that each partner shall be allowed 5 percent on his capital, and that LL shall be allowed an annual salary of P 8,500 and that MM shall be entitled to a minimum of P 14,000 per annum including amounts allowed as interest on capital and as share of profit. Profit after interest and salary allowances is to be divided between LL, MM, and PP 5:3:2 respectively. What amount must be earned by the partnership during 2020 before charges for interest or salary if LL is to receive an aggregate of P 20,000 to include interest, salary, and share of profit?
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