Question

Mar, Ban and Ina formed a partnership on Jan 1, 2020. Each contributed P120,000. Salaries were to be allocated as follows: Mar, P30,000; Ban, P30,000; Ina, P45,000. Drawings were equal to salaries and taken out evenly throughout the year. With sufficient partnership profit, Mar and Ban could split a bonus equal to 25% of partnership profit after salaries and bonus (in no event could the bonus be below zero).Remaining profits were to be split as follows: 30% for Mar, 30% for Ban, and 40% for Ina. For the year, partnership profit was P120,000. The ending capital balance of each partner is:

a. Mar, P125,100; Ban, P125,100; Ina, P124,800
b. Mar, P126,900; Ban, P126,900; Ina, P121,200
c. Mar, P125,500; Ban, P125,500; Ina, P124,000
d. Mar, P155,100; Ban, P155,100; Ina, P169,800

Answer 1

To find the ending capital balances for partners Mar, Ban, and Ina, we must account for each partner's initial capital contribution, salaries, bonuses, and profit share. None of the options given match the calculated balances of P125,250 for Mar, P125,250 for Ban, and P124,500 for Ina after considering all the factors. The information provided indicates a necessity to re-evaluate the calculations or the provided options.

Step-by-step explanation:

The task is to calculate the ending capital balances for each partner in a partnership based on the given profit, salaries, bonus, and profit-sharing agreement. To start, we'll calculate the bonus. According to the agreement, Mar and Ban are to split a bonus equal to 25% of the partnership profit after salaries and bonuses. The profit is P120,000, and the total salaries are P30,000 for Mar, P30,000 for Ban, and P45,000 for Ina, summing up to P105,000. Deducting salaries from the profit, we get P15,000 (P120,000 - P105,000). The bonus calculation is 25% of P15,000 which is P3,750 to be split between Mar and Ban, resulting in each getting P1,875. The remaining profit is P15,000 - P1,875 - P1,875 = P11,250.

Next, we distribute the remaining profit according to their profit-sharing ratio: 30% for Mar, 30% for Ban, and 40% for Ina. So, Mar and Ban each get P3,375 (30% of P11,250), and Ina gets P4,500 (40% of P11,250).

Now we will calculate the final capital balances, considering the initial contribution of P120,000, salary, drawings (which are equal to salaries), bonus, and share of profit. For Mar: P120,000 + P30,000 + P1,875 + P3,375 - P30,000 (drawings) = P125,250. For Ban: P120,000 + P30,000 + P1,875 + P3,375 - P30,000 (drawings) = P125,250. For Ina: P120,000 + P45,000 + P4,500 - P45,000 (drawings) = P124,500. Therefore, none of the provided options a, b, c, or d is correct based on this calculation. We would need to revisit the calculations or check the options provided for possible errors.