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?

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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 2 years ago
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