Question

Module 2: Assignment #2

The capital accounts of Scott and Tucker at the end of the fiscal year 2019 are as follows:

The partnership profit for the year ended December 31,2019 was \(\mathrm{P} 300,000\).

Instruction: Prepare schedule of profit allocation and journal entries to record transfer to profit to the capital accounts under each of the following independent assumptions:

1. Profit is divided \(60 \%\) to Scott and \(40 \%\) to Tucker.

2. Profit is divided into ratio of capital balances at the beginning of the period.

3. Profit is divided in the ratio of average capital balance.

4. Interest of \(8 \%\) is allowed on the average capital and the balance of profit is divided equally.

5. Salaries of \(\mathrm{P} 60,000\) and \(\mathrm{P} 48,000\) are allowed to Scott and Tucker, respectively, and the balance of the profit is divided in the ratio of capital balances at the end of the period.

6. Scott is allowed a bonus of \(\mathrm{P} 331 / 3 \%\) of profit after bonus, and the balance of the profit is divided in the ratio of the average capital.

Answer 1