Reference no: EM132568311

Question 1: Maxwell is trying to decide whether to accept a salary of P40,000 or salary of P25,000 plus a bonus of 10% of net income. After salaries and bonus as a means of allocating profit among partners. Salaries traceable to the other partners estimated to be P100,000. What amount of income would be necessary so that Maxwell would consider choices to be equal?

a. P165,000

b. 290,000

c. 265,000

d. 305,0005.

Question 2: Partner A first contributed P50,000 of capital into existing partnership on March 1, 2002. On June 1, 2002, said partner contributed another P20,000. On September 1, 2002, he withdrew P15,000 from the partnership. Withdrawal in excess of P10,000 are charged to the partner's capital accounts. What is the annual weighted average capital balance of Partner A?

a. P 32,500

b. 51,667

c. 60,000

d. 48,333

Question 3: Garcia and Henson formed a partnership on January 2, 2005 and agreed to share profits 90% and 10%, respectively. Garcia contributed capital of P 25,000. Henson contributed no capital but has a specialized expertise and manages the firm full time. There were no withdrawals during the year. The partnership agreement provides for the following:

• Capital accounts are to be credited annually with interest at 5% of beginning capital.
• Henson is to be paid a salary of P1,000 a month.
• Henson is to receive a bonus of 20% of income calculated before deducting his salary and interest on both capital accounts. Bonus, interest, and Henson's salary are to be considered partnership expenses.

The partnership 2005 income statement as follows:

Revenues P 96,450

Expenses (including salary, interest, and bonus) 49,700

Net income P 46,750

What is Henson's 2005 bonus?

a. P 11,688

b. 12,000

c. 15,000

d. 15,738