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What is the partnership profit for the year ended december

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Reference no: EM132709915

On January 1, 2020, Allan, Barry and Cario formed ABC Partnership with original capital contribution of P600,000, P1,000,000 and P400,000. Allan is appointed as managing partner.

During 2020, Allan, Barry and Cario made additional investments of P1,000,000, P400,000, and P600,000, respectively. At the end of 2020, Allan, Barry and Cario made drawings of P400,000, P200,000 and P800,000, respectively. At the end of 2020, the capital balance of Cario is reported at P600,000.

The profit or loss agreement of the partners is as follows:

  • 10% on original capital contribution of the partners
  • Quarterly salary of P80,000 and P20,000 for Allan and Barry, respectively
  • Bonus to Allan equivalent to 20% of the Net Income after interest and salary to all partners
  • Remainder to be distributed equally among the partners.

Problem 1: What is the partnership profit for the year ended December 31, 2020?

Group of answer choices

a. P1,800,000

b. P2,040,000

c. P2,100,000

d. P1,920,000

Reference no: EM132709915

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