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What eddie capital balances as of december should be

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Kathy and Eddie formed the K & E partnership several years ago. Capital account balances on January 1,20x5 were:Kathy, P993,500; and Eddie, P536,500.

  • The partnership agreement provides Kathy with an annual salary of P20,000 plus a bonus of 5% of partnership net income for managing the business. Eddie is provided an annual salary of P30,000 with no bonus. The remainder is shared evenly. Partnership net income for 20x5 was P60,000. Eddie and Kathy each invested an additional P10,000 during the year to finance a special purchase. Year-end drawing account balances were P30,000 for Kathy and P20,000 for Eddie.

Problem 1: Eddie's capital balances as of December 31, 20x5 should be:

a. P 560,000
b. P1,000,000
c. P 998,750
d. P 561,250

Reference no: EM132833906

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