Question

In: Accounting

A, B and C share profits and losses by allowing A and C to receive salaries...

A, B and C share profits and losses by allowing A and C to receive salaries of P20,000 each, salary of P9,000 to B and a 25% bonus to B after bonus. The remainder is divided in a 5:2:3 ratio to A, B and C each, respectively. If A and C received a total of P30,000, how much is the share of C?

Solutions

Expert Solution

Let the total profit of the firm be 'x'.
Profit of the firm X
Salary of the partners 49,000
(20,000 + 9,000 + 20,000)
Profit before bonus distribution X - 49,000
Bonus to B (Working note) (X-49000)*1/5
Profit after bonus distribution (X-49000)*4/5
Profit ratio of A and C together =   5 + 3    = 8
                                                                    10    10        10
Profit distributed to A and C together (X-49000)* 4 * 8
                      5    10
Given, total profit of A and C                     30,000
Therefore,
(X-49000)* 4 * 8      =    30,000
                      5    10
X - 49,000    =    30,000 * 5 * 10
                                               4      8
X - 49,000    =    46,875
X = 46,875 + 49,000
x = 95,875
C's profit share (X-49000)* 4 * 8
                      5    10
C's profit share (95,875 - 49,000)* 4 * 8
                                    5    10
C's profit share 11,250 P
Let the total profit of the firm be 'x'.
Profit of the firm X
Salary of the partners 49,000
(20,000 + 9,000 + 20,000)
Profit before bonus distribution X - 49,000
Bonus to B (X-49000)*1/5
Profit after bonus distribution (X-49000)*4/5
Profit ratio of A and C together =   5 + 3    = 8
                                                                    10    10        10
Profit distributed to A and C together (X-49000)* 4 * 8
                      5    10
Given, total profit of A and C                     30,000
Therefore,
(X-49000)* 4 * 8      =    30,000
                      5    10
X - 49,000    =    30,000 * 5 * 10
                                               4      8
X - 49,000    =    46,875
X = 46,875 + 49,000
x = 95,875
C's profit share (X-49000)* 4 * 8
                      5    10
C's profit share (95,875 - 49,000)* 4 * 8
                                    5    10
C's profit share 11,250 P

Working Note

Bonus = 25% on profit after bonus
Profit after bonus distribution 100
Bonus 25
Profit before bonus distribution (100+25) 125
Bonus = Profit before bonus distribution x 25/125
Bonus = (x -49,000)*25/125
Bonus = (x -49,000)*1/5

ekkarill92 answered 3 years ago
Next > < Previous

Related Solutions

Tanner and Teresa share income and losses in a 2:1 ratio after allowing for salaries of...
Tanner and Teresa share income and losses in a 2:1 ratio after allowing for salaries of $43,500 to Tanner and $62,400 to Teresa. Net income of the partnership is $134,700. Income should be divided as follows: a.Tanner, $62,700; Teresa, $72,000 b.Tanner, $77,000; Teresa, $57,700 c.Tanner, $57,700; Teresa, $77,000 d.Tanner, $58,700; Teresa, $76,000
3(12). Price and Phil share income and losses equally after allowing for salaries of $24,000 to...
3(12). Price and Phil share income and losses equally after allowing for salaries of $24,000 to Price and $30,000 to Phil. Net income for the partnership is $45,000. Income should be divided as a.Price, $22,500; Phil, $22,500. b.Price, $20,000; Phil, $25,000. c.Price, $27,000; Phil, $18,000. d.Price, $19,500; Phil, $25,500. 4(12). Arrow and Inlet share income and losses equally after allowing for salaries to Arrow of $27,000 and $33,000 to Inlet. Net income for the partnership is $75,000. If income should...
A, B and C are partners sharing profits and losses in the ratio of 60%,30% and...
A, B and C are partners sharing profits and losses in the ratio of 60%,30% and 10%. They decided to liquidate their business. The balance Sheet on the date of liquidation was as follows: Cash 20,000 Receivables 40,000 Other current assets 20,000 Machinery 80,000 Equipments 50,000 Land and building 300,000 Liabilities 150,000 Capital Account balances: A 200,000 B 124,000 C 36,000 C had become insolvent and was unable to pay towards any of his partnership debts. The assets and liabilities...
James and Bond are partners sharing profits and losses equally after allowing James a salary of...
James and Bond are partners sharing profits and losses equally after allowing James a salary of $ 20 000 per annum. On 1 January 2013 their capital and current account balances were as follows James    Bond $ $ Capital accounts 25 000    20 000 Current accounts 7500 5000 On 1 July 2013, the partners agree to the following revised terms of partnership. 1. James to transfer $ 6000 from his capital account to a Loan account on which...
Adams, Peters, and Blake share profits and losses for their APB Partnership in a ratio of...
Adams, Peters, and Blake share profits and losses for their APB Partnership in a ratio of 2:3:5. When they decide to liquidate, the balance sheet is as follows: Assets Liabilities and Equities Cash $ 44,000 Liabilities $ 48,000 Adams, Loan 10,800 Adams, Capital 59,400 Other Assets 208,000 Peters, Capital 81,000 Blake, Capital 74,400 Total Assets $ 262,800 Total Liabilities & Equities $ 262,800 Liquidation expenses are expected to be negligible. No interest accrues on loans with partners after termination of...
On January 1, the partners of Van, Bakel, and Cox (who share profits and losses in...
On January 1, the partners of Van, Bakel, and Cox (who share profits and losses in the ratio of 5:3:2, respectively) decide to terminate operations and liquidate their partnership. The trial balance at this date follows: Debit Credit Cash $ 35,000 Accounts receivable 100,000 Inventory 86,000 Machinery and equipment, net 223,000 Van, loan 64,000 Accounts payable $ 91,000 Bakel, loan 54,000 Van, capital 165,000 Bakel, capital 107,000 Cox, capital 91,000 Totals $ 508,000 $ 508,000 The partners plan a program...
On January 1, the partners Mary, Helen, and Jane (who share profits and losses in the...
On January 1, the partners Mary, Helen, and Jane (who share profits and losses in the ratio of 5:3:2, respectively) decide to liquidate their partnership. The trial balance at this date is as follows: Debit Credit Cash $ 25,000 Accounts receivable 80,000 Inventory 66,000 Machinery and equipment, net 203,000 Mary, loan 44,000 Accounts payable $ 81,000 Helen, loan 34,000 Mary, capital 125,000 Helen, capital 97,000 Jane, capital 81,000            Totals $ 418,000 $ 418,000 The partners plan a program of...
On January 1, the partners of Van, Bakel, and Cox (who share profits and losses in...
On January 1, the partners of Van, Bakel, and Cox (who share profits and losses in the ratio of 5:3:2, respectively) decide to liquidate their partnership. The trial balance at this date follows: Debit Credit Cash $ 22,000 Accounts receivable 74,000 Inventory 60,000 Machinery and equipment, net 197,000 Van, loan 38,000 Accounts payable $ 69,000 Bakel, loan 28,000 Van, capital 122,000 Bakel, capital 94,000 Cox, capital 78,000 Totals $ 391,000 $ 391,000 The partners plan a program of piecemeal conversion...
On January 1, the partners of Van, Bakel, and Cox (who share profits and losses in...
On January 1, the partners of Van, Bakel, and Cox (who share profits and losses in the ratio of 5:3:2, respectively) decide to terminate operations and liquidate their partnership. The trial balance at this date follows: Debit Credit Cash $ 23,000 Accounts receivable 76,000 Inventory 62,000 Machinery and equipment, net 199,000 Van, loan 40,000 Accounts payable $ 73,000 Bakel, loan 30,000 Van, capital 123,000 Bakel, capital 95,000 Cox, capital 79,000 Totals $ 400,000 $ 400,000 The partners plan a program...
Urmila and Umesh decided to undertake a venture jointly. The agree to share profits and losses...
Urmila and Umesh decided to undertake a venture jointly. The agree to share profits and losses in the ration of 3:2. Urmila supplied from her own stock goods worth R200 000, and paid R4 950 for freight and R1 200 for sundry expenses. Umesh purchased good for R195 000 for the venture and paid R 7 000 for selling expenses. Umesh accepted a bill for 3 months of R95 000 drawn by Umila as an advance. The bill was discounted...
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT