Reference no: EM132968693

Question - A partnership began its first year of operations with the following capital balances:

Yumul, Capital P143,000

Estor, Capital 104,000

Tengco, Capital 143,000

The Articles of Co-Partnership stipulated that profits and losses be assigned in the following manner. Yumul was to be awarded an annual salary of P26,000 with P13,000 salary assigned to Tengco.

Each partner was to be attributed with interest equal to 10% of the capital balance as of the first day of the year. The remainder was to be assigned on a 5:2:3 basis, respectively.

Each partner was allowed to withdraw up to P13,000 per year. Assume that the net loss for the first year of operations was P26,000 with net income of P52,000 in the second year. Assume further that each Partner withdrew the maximum amount from the business each year.

Required -

a. What was Yumul's share of loss for the first year?

b. What was the balance of Yumul's capital account at the end of the second year?

c. What was Tengco's share in income for the second year?

d. What was the balance of Yumul's capital account at the end of the second year?