The partners of STV Partnership are Sandy, Tammy and Vanny.

During the current year, their average capital balances are as follows:

Sandy 280,000
Tammy 200,000
Vanny 120,000

The partnership agreement provides that partners shall receive;

1. Annual allowance of 6% of their average capital balances;
2. Salary allowances as follows: Sandy - none; Tammy - P48,000; Vanny
P40,OOO•,
3. Tammy, who manages the business, is to receive a bonus of 25% of
income in excess of P72,000 after partners' interest and salary
allowances;
4. Residual profits will be divided in the ratio of 5:3:2

Instructions: Prepare separate schedules showing how income or loss will be divided
among the three partners in each of the following cases. The figure given is the
income or loss for the year that is available for distribution to partners.

1.  40,000 loss

2.  76,000 income
3.  260,000 income
1.  40,000 loss
Sandy Tammy Vanny
Capital Balances PHP 280,000.00 PHP 200,000.00 PHP 120,000.00
Annual Allowance (6%) PHP 16,800.00 PHP 12,000.00 PHP 7,200.00
Salary Allowances - 48,000 40,000
Bonus
Balance to be divided using 5:3:2 ratio
Sandy -164,000x5/10 (82,000)
Tammy -164,000x3/10 (49,200)
Vanny -164,000x2/10 (32,800)
Total PHP (65,200.00) PHP 10,800.00 PHP 14,400.00

2.  76,000 income

Sandy Tammy Vanny
Capital Balances PHP 280,000.00 PHP 200,000.00 PHP 120,000.00
Annual Allowance (6%) PHP 16,800.00 PHP 12,000.00 PHP 7,200.00
Salary Allowances - 48,000 40,000
Bonus
Balance to be divided using 5:3:2 ratio
Sandy -48,000x5/10 (24,000)
Tammy -48,000x3/10 (14,400)
Vanny -48,000x2/10 (9,600)
Total PHP (7,200.00) PHP 45,600.00 PHP 37,600.00

3.  260,000 income

Sandy Tammy Vanny
Capital Balances PHP 280,000.00 PHP 200,000.00 PHP 120,000.00
Annual Allowance (6%) PHP 16,800.00 PHP 12,000.00 PHP 7,200.00
Salary Allowances - 48,000 40,000
Bonus:
260,000-36,000-88,000=136,000
136,000-72,000=64,000 16,000
64,000x25%=16,000
Balance to be divided using 5:3:2 ratio
Sandy 120,000x5/10 60,000
Tammy 120,000x3/10 36,000
Vanny 120,000x2/10 24,000
Total PHP 76,800.00 PHP 112,000.00 PHP 71,200.00
 Total
PHP 600,000.00
PHP 36,000.00
88,000

(82,000)
(49,200)
(32,800)
PHP (40,000.00)

Total
PHP 600,000.00
PHP 36,000.00
88,000

(24,000)
(14,400)
(9,600)
PHP 76,000.00

Total
PHP 600,000.00
PHP 36,000.00
88,000

16,000

60,000
36,000
24,000
PHP 260,000.00