Question

A, B and C are partners. Their contributions are as follows: A, P60,000; B, P40,000; C, services. The partners did not agree on how to divide profits and losses. If there is a loss of P10,000, how should the said loss of P10,000 be shared by the partners?

a. A, P6,000; B, P4,000; C, 0
b. A, P3,000; B, P2,000; C, P3,500
c. A, P3,500; B, P3,500; C, P3,500
d. A, P3,500; B, P2,500; C, P4,000

Answer 1

The loss of $10,000 should be shared based on the ratio of their contributions. A should bear $6,000 of the loss, B should bear $4,000 of the loss, and C should not bear any loss.

Step-by-step explanation:

In this case, since the partners did not agree on how to divide profits and losses, the loss of $10,000 should be shared based on the ratio of their contributions.

A contributed $60,000, B contributed $40,000, and C contributed services, which means they did not contribute any monetary amount. To find the ratio, we add the monetary contributions and divide each partner's contribution by the total monetary contribution:

Total = $60,000 + $40,000 = $100,000

Ratio for A = $60,000 / $100,000 = 0.6 or 60%

Ratio for B = $40,000 / $100,000 = 0.4 or 40%

Since C did not contribute any monetary amount, C's ratio would be 0%.

Now, we can calculate the portion of the loss each partner should bear:

Loss for A = 0.6 * $10,000 = $6,000

Loss for B = 0.4 * $10,000 = $4,000

Loss for C = 0 * $10,000 = $0

Therefore, the correct answer is option a. A should bear $6,000 of the loss, B should bear $4,000 of the loss, and C should not bear any loss.