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    The document discusses four problems related to partnership operations and accounting: 1) Calculating total partnership income based on partner salaries, interest payments, and profit shares 2) Calculating net partnership income from financial statements 3) Determining the level of income needed for two compensation options to be equal for a partner 4) Adjusting profit sharing ratios when a partner reduces involvement

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    The document discusses four problems related to partnership operations and accounting: 1) Calculating total partnership income based on partner salaries, interest payments, and profit shares 2) Calculating net partnership income from financial statements 3) Determining the level of income needed for two compensation options to be equal for a partner 4) Adjusting profit sharing ratios when a partner reduces involvement

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    The document discusses four problems related to partnership operations and accounting: 1) Calculating total partnership income based on partner salaries, interest payments, and profit shares 2) Calculating net partnership income from financial statements 3) Determining the level of income needed for two compensation options to be equal for a partner 4) Adjusting profit sharing ratios when a partner reduces involvement

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    © All Rights Reserved
    Download as DOC, PDF, TXT or read online from Scribd
    Download as doc, pdf, or txt
    38 views3 pages

    Ave

    Uploaded by

    Jessa
    The document discusses four problems related to partnership operations and accounting: 1) Calculating total partnership income based on partner salaries, interest payments, and profit shares 2) Calculating net partnership income from financial statements 3) Determining the level of income needed for two compensation options to be equal for a partner 4) Adjusting profit sharing ratios when a partner reduces involvement

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    PARTNERSHIP OPERATION.pdf - Weighted Average X(100,000 x...

    This preview shows page 1 - 2 out of 2 pages.

    PARTNERSHIP OPERATION & ADMISSION OF A PARTNER1. JJ and KK are partners who share profits and
    losses in the ratioof 60% and 40%, respectively. JJ's salary is P60,000and P30,000for KK. The partners are
    also paid interest on their average capitalbalances. In 20x5, JJ received P30,000 of interest and KK,
    P12,000.The profit and loss allocation is determined after deductions for thesalary and interest
    payments. If KK's share in the residual income(income after deducting salaries and interest) wasP60,000
    in 20x5,what was the total partnership income?
    JJKKTotalSalary60,00030,00090,000Interest30,00012,00042,000Remainder60,000150,000282,0002. The
    partnership has the following accounting amounts:(1) Sales = P70,000(2) Cost of Goods Sold =
    P40,000(3) Operating Expenses = P10,000(4) Salary allocations to partners = P13,000(5) Interest paid to
    banks = P2,000(6) Partners' withdrawals = P8,000The partnership net income (loss) is:Sales70,000Cost of
    Sales40,000Gross Profit30,000Operating Expense(10,000)Interest paid to Banks(2,000)Net
    Income18,0003. Lancelot is trying to decide whether to accept a salary of P40,000or a salary of P25,000
    plus a bonus of 10% of net income after salaryand bonus as a means of allocating profit among the
    partners.Salaries traceable to the other partners are estimated to beP100,000. What amount of income
    would be necessary so thatLancelot would consider the choices to be equal?15,000 = .10 (Net Income -
    Bonus - Salaries)15,000 = .10(NI - 15,000 - 125,000)15,000 = .10NI - 1,500 - 12,50015,000 + 1,500 +
    12,500 = .10NI29,000 = .10NI29,000/.10 = .10NI/.10290,000 = Net Incomeor40,000 = 25,000 + .10 (Net
    Income - 15,000 - 125,000)40,000 = 25,000 + .10NI - 1,500 - 12,50040,000 = 11,000 + .10NI40,000 -
    11,000 = .10NI29,000 = .10NI29,000/.10 = .10NI/.10290,000 = Net Income4. Peter and Ronald are
    partners. They have shared profits andlosses 65/35 for a number of years. Peter has indicated that he
    isgoing to reduce his involvement in the partnership so the profit andloss ratio is being modified to
    45/55. At the date of the change in the

    PARTNERSHIP OPERATION.pdf - Weighted Average X(100,000 x...

    This preview shows page 1 - 2 out of 2 pages.

    PARTNERSHIP OPERATION.pdf - Weighted Average X(100,000 x...

    This preview shows page 1 - 2 out of 2 pages.


    PARTNERSHIP OPERATION & ADMISSION OF A PARTNER1. JJ and KK are partners who share profits and
    losses in the ratioof 60% and 40%, respectively. JJ's salary is P60,000and P30,000for KK. The partners are
    also paid interest on their average capitalbalances. In 20x5, JJ received P30,000 of interest and KK,
    P12,000.The profit and loss allocation is determined after deductions for thesalary and interest
    payments. If KK's share in the residual income(income after deducting salaries and interest) wasP60,000
    in 20x5,what was the total partnership income?
    JJKKTotalSalary60,00030,00090,000Interest30,00012,00042,000Remainder60,000150,000282,0002. The
    partnership has the following accounting amounts:(1) Sales = P70,000(2) Cost of Goods Sold =
    P40,000(3) Operating Expenses = P10,000(4) Salary allocations to partners = P13,000(5) Interest paid to
    banks = P2,000(6) Partners' withdrawals = P8,000The partnership net income (loss) is:Sales70,000Cost of
    Sales40,000Gross Profit30,000Operating Expense(10,000)Interest paid to Banks(2,000)Net
    Income18,0003. Lancelot is trying to decide whether to accept a salary of P40,000or a salary of P25,000
    plus a bonus of 10% of net income after salaryand bonus as a means of allocating profit among the
    partners.Salaries traceable to the other partners are estimated to beP100,000. What amount of income
    would be necessary so thatLancelot would consider the choices to be equal?15,000 = .10 (Net Income -
    Bonus - Salaries)15,000 = .10(NI - 15,000 - 125,000)15,000 = .10NI - 1,500 - 12,50015,000 + 1,500 +
    12,500 = .10NI29,000 = .10NI29,000/.10 = .10NI/.10290,000 = Net Incomeor40,000 = 25,000 + .10 (Net
    Income - 15,000 - 125,000)40,000 = 25,000 + .10NI - 1,500 - 12,50040,000 = 11,000 + .10NI40,000 -
    11,000 = .10NI29,000 = .10NI29,000/.10 = .10NI/.10290,000 = Net Income4. Peter and Ronald are
    partners. They have shared profits andlosses 65/35 for a number of years. Peter has indicated that he
    isgoing to reduce his involvement in the partnership so the profit andloss ratio is being modified to
    45/55. At the date of the change in the

    PARTNERSHIP OPERATION.pdf - Weighted Average X(100,000 x...

    This preview shows page 1 - 2 out of 2 pages.

    PARTNERSHIP OPERATION & ADMISSION OF A PARTNER1. JJ and KK are partners who share profits and
    losses in the ratioof 60% and 40%, respectively. JJ's salary is P60,000and P30,000for KK. The partners are
    also paid interest on their average capitalbalances. In 20x5, JJ received P30,000 of interest and KK,
    P12,000.The profit and loss allocation is determined after deductions for thesalary and interest
    payments. If KK's share in the residual income(income after deducting salaries and interest) wasP60,000
    in 20x5,what was the total partnership income?
    JJKKTotalSalary60,00030,00090,000Interest30,00012,00042,000Remainder60,000150,000282,0002. The
    partnership has the following accounting amounts:(1) Sales = P70,000(2) Cost of Goods Sold =
    P40,000(3) Operating Expenses = P10,000(4) Salary allocations to partners = P13,000(5) Interest paid to
    banks = P2,000(6) Partners' withdrawals = P8,000The partnership net income (loss) is:Sales70,000Cost of
    Sales40,000Gross Profit30,000Operating Expense(10,000)Interest paid to Banks(2,000)Net
    Income18,0003. Lancelot is trying to decide whether to accept a salary of P40,000or a salary of P25,000
    plus a bonus of 10% of net income after salaryand bonus as a means of allocating profit among the
    partners.Salaries traceable to the other partners are estimated to beP100,000. What amount of income
    would be necessary so thatLancelot would consider the choices to be equal?15,000 = .10 (Net Income -
    Bonus - Salaries)15,000 = .10(NI - 15,000 - 125,000)15,000 = .10NI - 1,500 - 12,50015,000 + 1,500 +
    12,500 = .10NI29,000 = .10NI29,000/.10 = .10NI/.10290,000 = Net Incomeor40,000 = 25,000 + .10 (Net
    Income - 15,000 - 125,000)40,000 = 25,000 + .10NI - 1,500 - 12,50040,000 = 11,000 + .10NI40,000 -
    11,000 = .10NI29,000 = .10NI29,000/.10 = .10NI/.10290,000 = Net Income4. Peter and Ronald are
    partners. They have shared profits andlosses 65/35 for a number of years. Peter has indicated that he
    isgoing to reduce his involvement in the partnership so the profit andloss ratio is being modified to
    45/55. At the date of the change in the

    PARTNERSHIP OPERATION & ADMISSION OF A PARTNER1. JJ and KK are partners who share profits and
    losses in the ratioof 60% and 40%, respectively. JJ's salary is P60,000and P30,000for KK. The partners are
    also paid interest on their average capitalbalances. In 20x5, JJ received P30,000 of interest and KK,
    P12,000.The profit and loss allocation is determined after deductions for thesalary and interest
    payments. If KK's share in the residual income(income after deducting salaries and interest) wasP60,000
    in 20x5,what was the total partnership income?
    JJKKTotalSalary60,00030,00090,000Interest30,00012,00042,000Remainder60,000150,000282,0002. The
    partnership has the following accounting amounts:(1) Sales = P70,000(2) Cost of Goods Sold =
    P40,000(3) Operating Expenses = P10,000(4) Salary allocations to partners = P13,000(5) Interest paid to
    banks = P2,000(6) Partners' withdrawals = P8,000The partnership net income (loss) is:Sales70,000Cost of
    Sales40,000Gross Profit30,000Operating Expense(10,000)Interest paid to Banks(2,000)Net
    Income18,0003. Lancelot is trying to decide whether to accept a salary of P40,000or a salary of P25,000
    plus a bonus of 10% of net income after salaryand bonus as a means of allocating profit among the
    partners.Salaries traceable to the other partners are estimated to beP100,000. What amount of income
    would be necessary so thatLancelot would consider the choices to be equal?15,000 = .10 (Net Income -
    Bonus - Salaries)15,000 = .10(NI - 15,000 - 125,000)15,000 = .10NI - 1,500 - 12,50015,000 + 1,500 +
    12,500 = .10NI29,000 = .10NI29,000/.10 = .10NI/.10290,000 = Net Incomeor40,000 = 25,000 + .10 (Net
    Income - 15,000 - 125,000)40,000 = 25,000 + .10NI - 1,500 - 12,50040,000 = 11,000 + .10NI40,000 -
    11,000 = .10NI29,000 = .10NI29,000/.10 = .10NI/.10290,000 = Net Income4. Peter and Ronald are
    partners. They have shared profits andlosses 65/35 for a number of years. Peter has indicated that he
    isgoing to reduce his involvement in the partnership so the profit andloss ratio is being modified to
    45/55. At the date of the change in the

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