Problem 1

BB, CC, and DD have capital balances of P250,000, P 150,000 and P 100,000,
respectively. Time devoted by the partners in the partnership follows:
BB three-fourths time
CC one-fourth time
DD one-half time
Instructions: Determine the share of each partner in the profit of P 300,000 if profit
is divided:
1. in the ratio of capital investment
2. in the ratio of time devoted in the business.
Problem 2
XX and YY formed a partnership on January 1, 2015. The changes in their
respective capital balances during the year ended December 31, 2015 are
presented below. During the year, the partnership earned a profit of P 700,000.
XX, Capital
YY, Capital
-------------------------------------------------------------------------------------10/31
60,000
1/1 360,000
6/30
80,000
1/1
440,000
5/31 100,000
10/31
140,000
Instructions: Prepare the entry to record the allocation of the partnership profit
under each of the following assumptions:
1. Each partner receives 8% interest on beginning capital balances and the
remainder is divided between XX and YY In the ratio of 3:1 respectively
2. XX and YY are given annual salaries of P 140,000 and P 260,000 respectively.
12% interest on the ending capital balances, and the remainder is divided equally.
3. XX and YY are given salaries of P 90,000 and p170,000, respectively, 12%
interest on average capital balances, and the remainder divided in the ratio of 3:1
4. XX and YY are given salaries of P 100,000 and P 200,000, respectively, 10%
interest on average capital balances, and the remainder divided 40% to XX and 60%
to YY.
5. Each partner receives 8% interest on beginning capital balances and a salary of
P 100,000, XX receives a bonus of 10% of profit after deducting interest and
salaries, and the remainder is divided in the ratio of 2:3.
Problem 3
The partners of AAA Partnership are Anna, Aiko, Amee. During the current
year, their average capital balances are as follows:
Anna
P 560,000
Aiko
400,000
Amee
240,000
The partnership agreement provides that partners shall received:
1. Annual 6% interest of their average capital balances
2. Salary allowances as follows: Anna none; Aiko- P 96,000; Amee - P
80,000
3. Aiko, who manages the business, is to receive a bonus of 25% of profit in
excess of P 144,000 after partners interest and salary allowances.
4. Residual profit will be divided in the ratio of 5:3:2
Instructions: Prepare separate schedules showing how profit or loss will be divided
among the three partners under each of the following independent cases. The
amount given in each case is the profit or loss for the year that is available for
distribution to partners.
1. P 50,000 loss
2. P 120,000 profit
3. P 500,000 profit