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Problem #16 Distribution of Profits or Losses Based On Partner's Agreement

The document describes three different profit and loss distribution agreements for three partners - Labasan, Gabayan, and Villanueva. It provides the capital accounts and terms for distributing profits for each agreement, and calculates the distributions accordingly. The profit was P789,000 for the first agreement, P680,800 for the second, and P929,400 for the third.

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16K views2 pages

Problem #16 Distribution of Profits or Losses Based On Partner's Agreement

The document describes three different profit and loss distribution agreements for three partners - Labasan, Gabayan, and Villanueva. It provides the capital accounts and terms for distributing profits for each agreement, and calculates the distributions accordingly. The profit was P789,000 for the first agreement, P680,800 for the second, and P929,400 for the third.

Uploaded by

spp
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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Problem #16

Distribution of Profits or Losses Based on Partner’s Agreement

Labasan, Gabayan, and Villanueva are manufacturers’ representative in the architecture business. Their capital accounts
were as follows:

Labasan, Capital Gabayan, Capital Villanueva, Capital


9/1 80000 1/1 300000 3/1 90000 1/1 400000 8/1 120000 1/1 500000
5/1 60000 7/1 50000 4/1 70000
9/1 40000 6/1 30000
Required:
For each of the following independent profit and loss agreement, prepare the profit distribution schedule:
1. Salaries are P150000 to Labasan, P200000 to Gabayan, and P180000 to Villanueva, Labasan receives a bonus of
5% of profit after bonus. Interest is 10% of ending balances. Labasan, Gabayan, and Villanueva divide any
remainder in a 3:3:4 ratio. Profit was P789000
2. Interest is 10% of average capital balances. Salaries are P240000 to Labasan, P210000 to Gabayan, and P250000
to Villanueva. Gabayan receives a bonus of 10% of profit after bonus and salary. Any remainder is divided
equally Profit was P680800.
3. Villanueva receives a bonus of 20% of profit after bonus and salaries. Salaries are P210000 to Labasan, P180000
to Gabayan, and P150000 to Villanueva. Interest is 10% of beginning capital balances. Labasan, Gabayan, and
Villanueva divide any remainder in an 8:7:5 ratio. Profit was P929400.

  Labasan Gabayan Villanueva Total


150000.0 200000.0
Salaries 0 0 180000.00 530000.00
Bonus 5% 37600.00     37600.00
Interest 10% 28000.00 40000.00 48000.00 116000.00
Remainder 31800.00 31800.00 42400.00 106000.00
247400.0 271800.0
Profit 0 0 270400.00 789600.00

  Labasan Gabayan Villanueva Total


240000.0 210000.0
Salaries 0 0 250000.00 700000.00
Interest 10% 31333.33 36333.33 52000.00 119666.67
Remainder -46288.89 -46288.89 -46288.89 -138866.67
225044.4 200044.4
Profit 4 4 255711.11 680800.00

  Labasan Gabayan Villanueva Total


210000.0 180000.0
Salaries 0 0 150000.00 540000.00
Bonus 20%     64900.00 64900.00
Interest 10% 30000.00 40000.00 50000.00 120000.00
Remainder 81800.00 71575.00 51125.00 204500.00
321800.0 291575.0
Profit 0 0 316025.00 929400.00

Ending Capital
Villanuev
  Labasan Gabayan a Total
Beginning 300000.0 400000.0 500000.0 1200000.0
Capital 0 0 0 0
Investments 60000.00 50000.00 70000.00 180000.00
    40000.00 30000.00 70000.00
- - 120000.0 -
Withdrawals 80000.00 90000.00 0 290000.00
280000.0 400000.0 480000.0 1160000.0
Ending Capital 0 0 0 0

Average Capital Balances


Villanuev
  Labasan   Gabayan   a
300000.0 400000.0 500000.0
1-Jan 0 1-Jan 0 1-Jan 0
1-May 40000.00 1-Jul 25000.00 1-Apr 52500.00
-
1-Sep 26666.67 1-Sep 13333.33 1-Jun 17500.00
- -
    1-Mar 75000.00 1-Aug 50000.00
313333.3 363333.3 520000.0
Total 3 Total 3 Total 0

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