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Partnership Accounts: IGGY and SWAGGY

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Questions and Answers

What is the weighted-average capital for IGGY and SWAGGY ni 2017?

P 224,000 and P 245,000

P 203,333 and P 221,167

P 221,333 and P 239,167 (correct)

P 256,000 and P 220,000

If the average capital for IGGY and SWAGGY from the above information is P 224,000 and P 238,000 respectively, what wil be the total amount of profit allocated to salary and interest ~distributions?

P90,000

P 146,200 (correct)

P 218, 200

P 240,00

I the average capital balances for IGGY and SWAGGY are P 200,000 and P 240,000, what wil be the total partnership profit allocations be for IGGY and SWAGGY ni 2017?

P 100,000 and P 140,000

P 108,000 and P 132,000 (correct)

P 120,000 and P 120,000

P140,000 and P 100,000

In apartnership, which of the following statements si true regarding the allocation of profits and losses among partners?

Profits and losses can be allocated ni any manner agreed upon by the partners Signup and view all the answers

Anew partner is admitted in an existing partnership through investment. fI the total contributed capital of all partners is higher than the total agreed capitalization of w:on partnership while the agreed capitalization of new partner is lower than his contribted capital, which of the following is correct?

Impairment loss shall be shared only by old partners with bonus coming from new partner. Signup and view all the answers

When a partner withdraws more money from the partnership than their share of profits, what is the result?

A decrease in that partner's capital account Signup and view all the answers

Study Notes

Partnership Profit Allocation and Capital Management

Weighted-average capital refers to the average amount of capital partners have invested over a specific period.
Average capital for IGGY in 2017 is P 224,000.
Average capital for SWAGGY in 2017 is P 238,000.
The total profit to be distributed among partners is based on their average capital contributions.
Average capital balances for IGGY are P 200,000 and for SWAGGY are P 240,000.
Partnership profit allocations for IGGY and SWAGGY in 2017 are determined by these average capital balances.

Admission of New Partners

A new partner can be admitted into an existing partnership by making an investment.
If total contributed capital from all partners exceeds the agreed capitalization, and the new partner's agreed capitalization is lower than their contribution, adjustments may be required.

Partner Withdrawals

When a partner withdraws more money than their allotted share of profits, this can lead to discrepancies in capital balance.
Excess withdrawals can affect overall partnership equity and need to be addressed through adjustments in future profit distributions.

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Description

Determine the profit and loss sharing ratio of IGGY and SWAGGY, two partners with different salary allowances and interest rates. Calculate the average capital balances and partners' drawings. Apply partnership accounting principles to solve the problem.