question archive Ruvi and Patrick are partners in a merchandising business
Ruvi and Patrick are partners in a merchandising business
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Ruvi and Patrick are partners in a merchandising business. During 2015, they withdrew their salary allowances of P34,000 and P59,000 respectively. Remaining profit/loss are shared in the ratio of 3:2 by Ruvi and Patrick. The income summary account before any profit allocation has a credit balance of P180,000. The partners' capital accounts show the following: Ruvi Patrick Beginning balance P85,000 P67,000 Additional investments 40,000 43,000 Withdrawal other than salaries (35,000) (20,000) Ending balance 90,000 90,000 20) What would be Patrick's equity balance at December 31, 2015 after dividing the profit?
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Patrick's equity balance after dividing profit
| Ruvi | Patrick | |
| Ending balance before Profit distribution | 90000 | 90000 |
| Add: Profit distribution | 86200 | 93800 |
| Ending balance after profit distribution | 176200 | 183800 |
Step-by-step explanation
Profit Distribution
| Ruvi | Patrick | Total | |
| Profit | 180000 | ||
| Salary allowance | 34000 | 59000 | -93000 |
| Remaining Profit | 87000 | ||
| Remaining profit distribution | 87000*3/5 = 52200 | 87000*2/5 = 34800 | 87000 |
| Total Distribution | 86200 | 93800 | 180000 |
