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Problem 3

The document outlines the distribution of profits and losses between partners Elisa Diaz and Ma. Concepcion Manalo based on different assumptions regarding profit division. It details their initial investments, profit calculations, and various methods of profit distribution, including ratios based on investment, interest allowances, salary allowances, and equal division. The total profit of ₱420,000 is analyzed under five independent scenarios to determine each partner's share.

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Lizzeille Anne Amor Macalintal
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49 views1 page

Problem 3

The document outlines the distribution of profits and losses between partners Elisa Diaz and Ma. Concepcion Manalo based on different assumptions regarding profit division. It details their initial investments, profit calculations, and various methods of profit distribution, including ratios based on investment, interest allowances, salary allowances, and equal division. The total profit of ₱420,000 is analyzed under five independent scenarios to determine each partner's share.

Uploaded by

Lizzeille Anne Amor Macalintal
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd

Problem #3

Rules for the Distribution of Profits and Losses

Elisa Diaz and Ma. Concepcion Manalo formed a partnership, investing ₱330,000 and
₱110,000, respectively. Determine the partners’ participation in the 2019 profit of ₱420,000
under each of the following independent assumptions:

a. No agreement concerning division of profit.


b. Divided in the ratio of original capital investment.
c. Interest at the rate of 8% allowed on original investments and the remainder divided in
the ratio of 2:3.
d. Salary allowances of ₱50,000 and ₱70,000 respectively, and the balance to be divided
equally.
e. Allowance of interest at the rate of 8% on original investments, salary allowances of
₱50,000 and ₱70,000, respectively, and the remainder to be divided equally.

Diaz Manalo Total


Contribution ₱330,000 ₱110,000 ₱440,000
Ratio 0.75 0.25

Profit 315,000 105,000 ₱420,000

Interest 26,400 8,800 ₱35,200


Remainder Ratio 153,920 230,880 ₱384,800

Salary 50,000 70,000 ₱120,000


Remainder 150,000 150,000 ₱300,000
200,000 220,000 ₱420,000

Divided equally 132,400 132,400 ₱264,800


Remainder 208,800 211,200 ₱420,000

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