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    Problems Partnership Operations

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    Maryjoy Escarez
    - Matt, Matty, and Matthew formed a partnership with initial capital contributions of P200,000, P250,000, and P300,000 respectively - Additional capital was contributed and withdrawn throughout the year - The partnership generated P500,000 in income - Salaries, interest, and bonuses are to be deducted and the remainder distributed under various scenarios - The questions ask to determine each partner's highest and lowest shares under the different distribution scenarios and who had the highest average capital

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    Problems Partnership Operations

    Uploaded by

    Maryjoy Escarez
    42 views25 pages
    - Matt, Matty, and Matthew formed a partnership with initial capital contributions of P200,000, P250,000, and P300,000 respectively - Additional capital was contributed and withdrawn throughout the year - The partnership generated P500,000 in income - Salaries, interest, and bonuses are to be deducted and the remainder distributed under various scenarios - The questions ask to determine each partner's highest and lowest shares under the different distribution scenarios and who had the highest average capital

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    - Matt, Matty, and Matthew formed a partnership with initial capital contributions of P200,000, P250,000, and P300,000 respectively - Additional capital was contributed and withdrawn throughout the year - The partnership generated P500,000 in income - Salaries, interest, and bonuses are to be deducted and the remainder distributed under various scenarios - The questions ask to determine each partner's highest and lowest shares under the different distribution scenarios and who had the highest average capital

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    42 views25 pages

    Problems Partnership Operations

    Uploaded by

    Maryjoy Escarez
    - Matt, Matty, and Matthew formed a partnership with initial capital contributions of P200,000, P250,000, and P300,000 respectively - Additional capital was contributed and withdrawn throughout the year - The partnership generated P500,000 in income - Salaries, interest, and bonuses are to be deducted and the remainder distributed under various scenarios - The questions ask to determine each partner's highest and lowest shares under the different distribution scenarios and who had the highest average capital

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
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    PROBLEM 1

    Matt, Matty and Matthew entered into a partnership on March 1, 2022


    contributing capital of P 200,000, P 250,000 and P 300,000 respectively. On
    July 1, 2022 Matt added capital of P 100,000 while Matty withdrew P 20,000
    capital. On October 1, 2022, Matthew made additional cash investment of P
    40,0000.

    During the year, the partnership generated income of P 500,000.


    The following will also be given to the partners:
    Bonus to Matt of 15% of profit after salaries and interest but before bonus
    Annual salaries of P 240,000 to be divided according to beginning
    capital. (round to full percentage)
    Interest on average capital of 10% to Matt, 15% to Matty, 20% to Matthew.
    Determine the profit share of each partner based on the following
    instances:

    1.Equal distribution of profit.


    2.Profit to be distributed to Matt (40%), Matty (35%), Matthew (25%)
    3. Profit to be distributed based on beginning capital. (round
    to whole percentage)
    4. Profit to be distributed based on ending capital. (round to whole
    percentage)
    5. Profit to be distributed based on average capital. (round to
    whole percentage)
    QUESTIONS
    Determine the correct answer:

    1. For the remainder of profit after salaries, interest and


    bonus, which scenario will give the highest share for
    the remainder for:
    a. Matt
    b. Matty
    c. Matthew
    2. How much is the balance of profit after salaries, interest
    and bonus?
    QUESTIONS
    Determine the correct answer:

    3. Which scenario will give the highest total profit share for:
    a. Matt
    b. Matty
    c. Matthew
    4. Which scenario will give the lowest total profit share for:
    a. Matt
    b. Matty
    c. Matthew
    5. Who has the highest average capital?
    Capital:
    CAPITAL:

    MATT MATTY MATTHE


    W

    BEGINNING
    P P
    CAPITAL P
    200,000 250,000
    300,000

    ENDING
    Average Capital:

    Matt - Beginning Capital (3/1) P 200,000 x 4 = P 800,000


    Ending Capital (7/1) P 300,000 x 6 = P
    1,800,000 Total P 2,600,000
    Divide by 10 (Average Capital) P 260,000

    Matty - Beginning Capital (3/1) P 250,000 x 4 = P 1,000,000


    Ending Capital (7/1) P 230,000 x 6 = P 1,380,000
    Total P 2,380,000
    Divide by 10 (Average Capital) P 238,000

    Matthew - Beginning Capital (3/1) P 300,000 x 7 = P 2,100,000


    Ending Capital (10/1) P 340,000 x 3 = P 1,020,000
    Total P 3,120,000
    Divide by 10 (Average Capital) P 312,000
    BONUS, INTEREST AND
    SALARIES

    MATT MATTY MATTHE TOTAL


    W
    SALARIE
    P P P
    S
    P 96,000 240,000
    64,800 79,200
    INTEREST
    P 62,400 P
    124,100
    BONUS (135,900* P

    26,000

    *500,000 - (240,000 + 124,100) = 135,900


    ** Balance: 135,900 - 20,385 = 115,515
    PROFIT AND LOSS
    DISTRIBUTION (REMAINDER)
    MATT MATTY MATTHEW TOTAL

    EQUALLY P 38,505 P 38,505 P 38,505 P


    115,515

    PERCENTAGE P 46,206 P 40,430.25 P 28,878.25 P


    115,515

    BEGINNING P 31,189.05 P 38,119.95 P 46,206 P


    115,515

    ENDING P 39,275.10 P 30,033.90 P 46,206 P


    115,515

    AVERAGE P 36,964.80 P 33,499.35 P45,050.85 P


    115,515
    PROFIT AND LOSS
    DISTRIBUTION TOTAL (MATT)

    REMAINDER SALARIES INTEREST BONUS TOTAL

    EQUALLY P 38,505 P 64,800 P 26,000 P 20,385 P 149,690

    PERCENTAGE P 46,206 P 64,800 P 26,000 P 20,385 P 157,391

    BEGINNING P P 64,800 P 26,000 P 20,385 P 142,374.05


    31,189.05

    ENDING P P 64,800 P 26,000 P 20,385 P 150,460.10


    39,275.10

    AVERAGE P P 64,800 P 26,000 P 20,385 P 148,149.80


    36,964.80
    PROFIT AND LOSS
    DISTRIBUTION TOTAL (MATTY)

    REMAINDER SALARIES INTEREST TOTAL

    EQUALLY P 38,505 P 79,200 P 35,700 P 153,405

    PERCENTAGE P 40,430.25 P 79,200 P 35,700 P 155,330.25

    BEGINNING P 38,119.95 P 79,200 P 35,700 P 153,019.95

    ENDING P 30,033.90 P 79,200 P 35,700 P 144,933.9

    AVERAGE P 33,499.35 P 79,200 P 35,700 P 148,399.35


    PROFIT AND LOSS DISTRIBUTION
    TOTAL (MATTHEW)

    REMAINDER SALARIES INTEREST TOTAL

    EQUALLY P 38,505 P 96,000 P 62,400 P 196,905

    PERCENTAGE P 28,878.25 P 96,000 P 62,400 P 187,278.75

    BEGINNING P 46,206 P 96,000 P 62,400 P 204,606

    ENDING P 46,206 P 96,000 P 62,400 P 204,606

    AVERAGE P45,050.85 P 96,000 P 62,400 P 203,450.85


    PROBLEM 2
    Clara, Charles, Danny and Desiree formed a partnership on January 1, 2022. Here are the
    key dates and transactions after the formation:

    January 1, 2022: Capital Contribution


    Clara - P 150,000
    Charles - P 175,000
    Danny - P 125,000
    Desiree - P 100,000

    April 1, 2022:
    Additional Investment of P 25,000 from Clara, P 2,000 from Danny

    October 1, 2022:
    Withdrawal of P 15,000 from Charles
    Operations for the year are as follows:

    Sales: P 1,800,000
    Inventory, Jan 1 200,000
    Purchases 780,000
    Inventory, Dec 31 130,000
    Selling Expenses 200,000
    General Expenses 120,000
    Income Tax Expense 189,000
    ASSUMPTIONS
    The following will also be given to the partners:
    Bonus to Clara of 12% of profit after salaries and interest but before bonus
    Bonus to Desiree of 10% of profit after salaries, interest and bonus (round to
    nearest whole number)
    Annual salaries of P 200,000 to be divided according to ending capital.
    (round to full percentage)
    Interest based on the following:
    Clara - 10% on beginning capital
    Charles - 10% on ending capital
    Danny - 10% on average capital
    Desiree - P 6,000
    Determine the profit share of each partner based on the following
    instances:

    1.Equal distribution of profit.


    2.Profit to be distributed to Clara (35%), Charles (30%), Danny
    (25%) and Desiree (10%)
    3. Profit to be distributed based on beginning capital. (round to
    whole percentage)
    4. Profit to be distributed based on ending capital. (round to
    whole percentage)
    5. Profit to be distributed based on average capital. (round to whole
    percentage)
    QUESTIONS
    1.How much is the interest received by Clara?
    2.What is the average capital of Charles?
    3.Who has the highest average capital of the 4 partners?
    4.What is the annual salary of Danny?
    5.How much is the difference between salary of Clara and Charles?
    6.What is the Profit after tax of the partnership?
    7.How much is Clara's bonus?
    8.How much is Desiree's bonus?
    9.What is the total amount received by Charles after distribution of all payments and
    profits?
    10. Which scenario will result into the highest over-all amount received by Danny?
    QUESTIONS
    11. How much more is Desiree's total profit share (including salaries, interest and
    bonus) if compared when computed using ending capital and average capital?
    12. How much is the bonus of Desiree?
    13. How much more does Clara receive in salaries compared to Charles?
    14. How much is the total interest received of all four partners?
    15. In which scenario does Charles received the highest total profit share (including
    salaries, interest and bonus)?
    16. In which scenario will Desiree receive a higher total share than Danny?
    17. How much more is Clara's ending capital compared to her average capital?
    18. Which is higher - Charles ending capital or Charles average capital?
    19. Who has the highest average capital in figures?
    20. How much is the difference between Clara and Desiree's bonus?
    Capital:

    CLARA CHARLE DANNY DESIRE


    S E

    BEGINNIN
    P P
    G 150,000 P 125,000 P
    CAPITAL 175,000 100,000

    ENDING
    P P
    CAPITA 175,000 P 127,000 P
    L 160,000 100,000
    Average Capital:

    Clara - Beginning Capital (1/1) P 150,000 x 3 = P 450,000


    Ending Capital (4/1) P 175,000 x 9 = P
    1,575,000 Total P 2,025,000
    Divide by 12 (Average Capital) P 168,750

    Charles - Beginning Capital (1/1) P 175,000 x 9 = P 1,575,000


    Ending Capital (10/1) P 160,000 x 3 = P 480,000
    Total P 2,055,000
    Divide by 12 (Average Capital) P 171,250

    Danny - Beginning Capital (1/1) P 125,000 x 3 = P 375,000


    Ending Capital (4/1) P 127,000 x 9 = P 1,143,000
    Total P 1,518,000
    Divide by 12 (Average Capital) P 126,500
    BONUS, INTEREST AND
    SALARIES
    CLARA CHARLE DANNY DESIREE TOTAL
    S
    SALARIE P P P 36,000 P
    P 200,000
    S 62,000 P 46,000 P 6,000
    56,000
    INTERES 15,000 P P

    *441,000 - (200,000 + 49,650) = 191,350, thus 191,350 x 12%


    ** B = 10% (441,000-200,000-49,650-22,962-B)
    ** Balance: 191,350 - 22,962 - 15,308 = 153,080
    PROFIT AND LOSS
    DISTRIBUTION (REMAINDER)
    CLARA CHARLES DANNY DESIREE TOTAL

    EQUALLY 38,270 38,270 38,270 38,270 153,080

    PERCENTAGE 53,578 45,924 38,270 15,308 153,080

    BEGINNING 41,331.60 48,985.60 35,208.40 27,554.40 153,080

    ENDING 47,454.80 42,862.40 35,208.40 27,554.40 153,080

    AVERAGE 45,924 45,924 33,677.6 27,554.40 153,080


    PROFIT AND LOSS
    DISTRIBUTION TOTAL (CLARA)

    REMAINDER SALARIES INTEREST BONUS TOTAL

    EQUALLY 38,270 62,000 15,000 22,962 138,232

    PERCENTAGE 53,578 62,000 15,000 22,962 153,540

    BEGINNING 41,331.60 62,000 15,000 22,962 141,293.60

    ENDING 47,454.80 62,000 15,000 22,962 147,416.80

    AVERAGE 45,924 62,000 15,000 22,962 145,886


    PROFIT AND LOSS DISTRIBUTION
    TOTAL (CHARLES)

    REMAINDER SALARIES INTEREST TOTAL

    EQUALLY 38,270 56,000 16,000 110,270

    PERCENTAGE 45,924 56,000 16,000 117,924

    BEGINNING 48,985.60 56,000 16,000 120,985.60

    ENDING 42,862.40 56,000 16,000 114,862.40

    AVERAGE 45,924 56,000 16,000 117,924


    PROFIT AND LOSS DISTRIBUTION
    TOTAL (DANNY)

    REMAINDER SALARIES INTEREST TOTAL

    EQUALLY 38,270 46,000 12,650 96,920

    PERCENTAGE 38,270 46,000 12,650 96,920

    BEGINNING 35,208.40 46,000 12,650 93,858.40

    ENDING 35,208.40 46,000 12,650 93,858.40

    AVERAGE 33,677.6 46,000 12,650 92,327.60


    PROFIT AND LOSS
    DISTRIBUTION TOTAL (DESIREE)

    REMAINDER SALARIES INTEREST BONUS TOTAL

    EQUALLY 38,270 36,000 6,000 15,308 95,578

    PERCENTAGE 15,308 36,000 6,000 15,308 72,616

    BEGINNING 27,554.40 36,000 6,000 15,308 84,862.40

    ENDING 27,554.40 36,000 6,000 15,308 84,862.40

    AVERAGE 27,554.40 36,000 6,000 15,308 84,862.40

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