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How much is the share of aa in the partnership profits

    Assignment Instructions

    Assignment ID: FG133136238

    Question – AA and BB are partners with capital accounts that had the following transactions during 2022:

    AA

    BB

    Debit

    Credit

    Debit

    Credit

    Beginning balance, January 1

    P270,000

    P280,000

    February 28

    P80,000

    March 1

    120,000

    April 30

    160,000

    June 1

    P100,000

    August 1

    140,000

    September 30

    40,000

    October 31

    40,000

    The partnership agreement provides for the following:

    1. Interest of 9% is to be provided to AA

    2. Salaries of P4,000 is to be given to BB per quarter

    3. A bonus of 25% is to be given to AA based on net income after interest and salaries

    4. Remaining balance is to be allocated on a ratio of 40:60.

    The income summary account has a credit balance of P1,050,000 before profit distribution. BB has a Drawing account amounting to P40,000 which is a withdrawal made by BB in anticipation of future profits on July 1, 2022.

    Required – How much is the share of AA in the partnership profits?

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