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Capital Allocation and Profit Distribution

A and B are partners who agreed to a capital of 300,000. A contributed 200,000 and B contributed 80,000. A's required contribution was 168,000 and B's was 112,000. Therefore, A needs to contribute an additional 32,000 and B can withdraw 32,000.

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Bianca Lizardo
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134 views8 pages

Capital Allocation and Profit Distribution

A and B are partners who agreed to a capital of 300,000. A contributed 200,000 and B contributed 80,000. A's required contribution was 168,000 and B's was 112,000. Therefore, A needs to contribute an additional 32,000 and B can withdraw 32,000.

Uploaded by

Bianca Lizardo
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as XLSX, PDF, TXT or read online on Scribd
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Lizardo, Bianca Regina S.

BS Accountancy

Agreed Capital: 300,000

A's required capital balance


(280,000 x 60%) 168,000
B's required capital balance
(280,000 x 40%) 112,000

A B
Actual Contribution 200,000 80,000
Required Capital Balance 168,000 112,000
Additional (withdrawal) 32,000 -32,000

A will have to make an additional investment of 32,000 on the other hand,


B will withdraw part of his investment amounting to 32,000.
AAA BBB
Amount to be allocated: 33,000

Allocation:

1. Salaries 30,000

2.Interest (10%)
(120,000 x 10%) 12,000
(60,000 x 10%) 6,000
(40,000 x 10%)

3. Allocation of receiving loss 11,000 11,000


(33,000/3 = 11,000)

Allocated 31,000 -5,000

AAA should decrease by 11,000

AAA
Allocation:

1. Bonus to AAA
First 100,000: (100,000 x 10%) 10,000
Over 100,000: [(250,000 - 100,000) x 20%] 30,000

2. Bonus to BBB and CCC


[(250,000 - 10,000 - 30,000 - 150,000) x 5%]

3. Allocation of receiving profit


[(250,000 - 10,000 - 30,000 - 6,000) / 3] 68,000

Allocated 108,000

A total of 108,000 should be allocated to AAA

Adam Eve
Amount to be allocated: 360,000

Allocation:
1. Salaries 60,000 60,000
2. Bonus after bonus 60,000
3. Allocation of receiving profit 90,000 90,000
[(360,000 - 60,000 - 60,000 - 60,000) / 2]

Allocated 210,000 150,000

Eve's share of the profit is a total of 150,000


Jo, Capital 620,000
Li, Capital 400,000
Bi, Capital 380,000
Total 1,400,000

Total agreed capital of the new partnership


(1,400,000 / 80%) 1,750,000
Total contributed capital of the old partners 1,400,000
Mac's contribution 350000

Mac shall contribute a total of 350,000 in cash or other assets

Agreed Capital Contributed Capital


Old Partners 118,250 100,000
New Partners 96,750 115,000
Total 215,000 215,000

The amount of bonus is 18,250


Mr. Romeo Ginez
Assignment 1

Total
280,000
280,000
0
CCC TOTAL

20,000 50,000

4,000
22,000
11,000 33,000

13,000 39,000

BBB CCC

3,000 3,000
68,000 68,000

71,000 71,000
Increase or Decrease
18250
-18250
0

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