Mega Bank of F3 Questions & Answers

[Admin]

Mega Bank of F3 Questions & Answers
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[Ravinee B]

Mega Bank of F3 Questions & Answers
Create a new thread here for each question.
Lets see ALL student participate and post questions and answers. Remember this is for YOU!! and for YOUR!! benefit.
Use it to help yourself and fellow students.

thats really nice will help us

[marion]

A question on partnerships: X and Y are in partnership. They share profits equally after charging a salary of $40,000 per year for X and interest on capital at 5% per year. At 1 Jan 06 the capital balances were: X $200,000,Y $100,000. On 1 July 2006, Y introduced a further $100,000 capital, and X's salary was discontinued. The partnership profit for the year ending 31 Dec 2006 was $337,500. What was X'total profit share for the year ended 31 Dec 2006? A $182,500,B $178,750, C $180,000, D $190,000. Please help me as I can't arrive at the answer.!!!

[Ravinee B]

A question on partnerships: X and Y are in partnership. They share profits equally after charging a salary of $40,000 per year for X and interest on capital at 5% per year. At 1 Jan 06 the capital balances were: X $200,000,Y $100,000. On 1 July 2006, Y introduced a further $100,000 capital, and X's salary was discontinued. The partnership profit for the year ending 31 Dec 2006 was $337,500. What was X'total profit share for the year ended 31 Dec 2006? A $182,500,B $178,750, C $180,000, D $190,000. Please help me as I can't arrive at the answer.!!!

Hi
am getting an answer of 150000 bt its not included in it
help please
Regards
RAVINEE

[Sonal]

I think there is something missing in your question,

If it is net profit for the year then,

Interest on capital for X = 200,000 x 5% = 10,000
Interest on capital for Y = (100,000 + 100,000) x 5% = 10,000

Partnership divisible profit
= 337,500 – interest on capital @5% (i.e. 10,000 + 10,000)
= 337,500 – 20,000
= 317,500

Profit of X = 317,500/2 = 158,750

[Sonal]

Interest on capital for X = 200,000 x 5% = 10,000
Interest on capital for Y = (100,000 + 100,000) x 5% = 10,000

If it is assumed that 40,000 is already deducted from given partnership profit of 337,500 and now onwards they want to discontinue, then

Partnership profit = 337,500 - 17,500 + 40,000 = 357,500

Profit of X = 357,500 /2 = 178,750

[Ravinee B]

I think there is something missing in your question,

If it is net profit for the year then,

Interest on capital for X = 200,000 x 5% = 10,000
Interest on capital for Y = (100,000 + 100,000) x 5% = 10,000

Partnership divisible profit
= 337,500 – interest on capital @5% (i.e. 10,000 + 10,000)
= 337,500 – 20,000
= 317,500

Profit of X = 317,500/2 = 158,750

Hi Sonal
correct me if am wrong but
interest on capital for X=(5%*200000)=10000
interest on capital for Y =(5%*100000*12/12)+(5%*100000*6/12)=7500

and u shud deduct salary of X =(40000*6/12)=20000

Then deduct it from the profit mean =(337500-(10000+7500+20000)=300000

then divide the profit equally with the two partner =(300000/2)=150000

Correct me if am wrong please
Regards
Ravinee

[Grace]

Hi RB

All your calculations are correct. The correct answer is $180,000.

Everything is as calculated by you.

Now, X's share in the profit is $337,5000 is as follows:

Salary $20,000
Interest $10,000 and
Profit share $150,000

therefore X will get total $180,000 in the profit of the firm

[Ravinee B]

Hi RB

All your calculations are correct. The correct answer is $180,000.

Everything is as calculated by you.

Now, X's share in the profit is $337,5000 is as follows:

Salary $20,000
Interest $10,000 and
Profit share $150,000

therefore X will get total $180,000 in the profit of the firm

HI dear
,ean we should add back the interest and the salary to the profit shared then
Reagards
Ravinee

[marion]

I have another question on partnerships which I cannot arrive at an answer.G,H and I are in partnership compiling their accounts for the year to 31 December each year. The profit sharing arrangements are as follows: Until 30 June 2003, annual salaries H:$40,000, I:$20,000; Balance of profit splits G 60%,H 20%, I 20%. From 1 July 2003, salaries are to be discontinued and profit is to be divided G 50%, H 30% and I 20%. The profit for the year ended 31 Dec 2003 was $400,000, before charging partners' salaries, accruing evenly through the year and after charging an expense of $40,000, which it was agreed related wholly to the first 6 months of the year. How should the profit for the year be divided among the partners? a)G $182000,H $130000, I $88000 b)G$200000, H $116000, I $84000 c)G $198000, H $118000, I $88000 d)$180000, H $132000, I $88000? Please help!!!