Tyler, Barnes and Solace formed a partnership on Jan. 1, 2019. Each contributed ₱120,000.

Salaries were to be allocated as follows: Tyler, ₱30,000; Barnes, ₱30,000; Solace, ₱45,000.
Drawings were equal to salaries and to be taken out evenly throughout the year. With sufficient
partnership profit, Tyler and Barnes could split a bonus equal to 25% of partnership profit, After
salaries and bonus ( in no event could be the bonus go below zero).

Remaining profits were to be split as follows: 30% for Tyler; 30% for Barnes and 40% for Solace.
For the year, partnership profit was ₱120,000. Calculate the ending capital for each partner.

A. Tyler, ₱125,100; Barnes, ₱125,100; Solace, ₱124,800

B. Tyler, ₱126,000; Barnes, ₱126,000; Solace, ₱124,500

C. Tyler, ₱125,500; Barnes, ₱125,500; Solace, ₱124,000

D. Tyler, ₱155,100; Barnes, ₱155,100; Solace, ₱169,800

Solution

Tyler Barnes Solace Total

Capital Contibution 120000 120000 120000 360000
share in Net Income:
Salaries 30000 30000 45000 105000
Bonus 1500 1500 3000
Remainder 3600 3600 4800 12000
Total 35100 35100 49800 120000
Total 155100 155100 169800 480000
Drawings 30000 30000 45000 105000
Capital Balance, end 125100 125100 124800 375000

Computation of Bonus

Bonus =(Profit-Salaries-Bonus)x25%

Bonus =(120000-105000-Bonus)x25%
Bonus =(15000-Bonus)x25%

Bonus= 3750-.25Bonus

Bonus +.25Bonus=3750

Bonus=3000

A. Tyler, ₱125,100; Barnes, ₱125,100; Solace, ₱124,800 Answer