Kenny and Rogers share P/L 50:50. Kenny and Rogers will have salaries of
P20,000 and P30,000, respectively, and both to receive 10% interest on their
average capital balances. Total net income for the year is P120,000.
Jan 1 capital
Annual drawings
Kenny
P100,000
18,000
Rogers
P120,000
Permanent withdrawals
Jun 03
-12,000
May 02
-15,000
Addt'l Investmnet:
Jul 03
40,000
Oct 02
50,000
1. If the average capital balances for Kenny and Rogers are P100,000 and P120,000, what will their
final profit allocations respectively?
a.
50k and 70k
b. 70k and 50k
c. 54k and 66k
d. 75k and 45k
2. If average capital for Kenny and Rogers is P112,000 and P119,000, respectively, what will be the
total amount of profit allocated after the salary and interest distributions are completed?
a. 80k
b. 70k
c. 75k
d. 73.1k