POLYTECHNIC UNIVERSITY OF THE PHILIPPINES – STA.

MESA
College of Accountancy and Finance
First Semester A.Y. 2024 – 2025

ACCO 30103 Integrated Review Course in

ADVANCED FINANCIAL ACCOUNTING AND REPORTING
DELA CRUZ
AFAR-01B
PARTNERSHIP OPERATIONS

Types of Partners

For the purpose of partnership operations accounting, these are the type of partners:
1. Capitalist partner – one who contributes cash or non-cash assets to the partnership.
2. Industrial partner – one who contributes service to the partnership.
3. Capitalist-industrial partner – one who contributes both cash or other non-cash asset and services to the
partnership.

Major Consideration in Accounting for Partnership Operations

The major consideration in accounting for partnership operations is the division of profits or losses among the
partners. Such profits or losses are divided in accordance with the following rules (in order of priority):
1. In accordance with the partners’ agreement;
For example, profits or losses may be divided:
a. Equally;
b. Arbitrarily;
c. Based on average capital (most just basis);
d. Another basis as agreed upon.
2. If only profits ratio has been agreed upon, share in the losses shall be in the same ratio;
3. If no agreement has been made, in accordance with their original capital contribution.
For an industrial partner, who has no capital contribution, additional considerations must be
observed:
a. If there is profit – his/her share shall be what is deemed just and equitable.
b. If there is loss – he/she shall not share/liable.
c. If a capitalist-industrial partner – he/she shall also receive a share proportion to his capital.

In addition to profit or loss sharing, the partners may also agree on any of the following:
1. Salaries – generally, an industrial partner receives salary for his/her services.
2. Bonuses – a partner is entitled to a bonus only if the partnership earns profit.
3. Interest on capital contributions – the interest is for the capital contributions made by the partners.
As a general rule, these three (salaries, bonus, interest) are not partnership expenses.

Withdrawals
1. Permanent (capital) withdrawal – debited to capital account. Considered in computing ending and
average capital balances.
2. Temporary (personal) withdrawal – debited to drawings account. Ignored in computing ending and
average capital balances.

Agreement Based on Rank of Order of Priority

If the profit of the partnership is not sufficient to cover the allowances such as salaries and interest on capital
contributions, the partners must agree on the priority of the various features. In this case, the profit will be shared
to the partners in the basis of the allowance (salary or interest on capital contribution) which is not satisfied by
the net income.

Corrections in Profit for Errors and Omissions Prior to Distribution

Correction to current year’s profit for errors made in

Prior Year Current Year
1. Unrecorded assets - +
2. Unrecorded liabilities + -

 Page 1 of 10
ADVANCED FINANCIAL ACCOUNTING AND REPORTING 
Accounting for Special Transactions PARTNERSHIP OPERATIONS

3. Overstatement of inventories + -
4. Understatement of inventories - +
5. Overstatement of purchases - +
6. Understatement of purchases + -
7. Overstatement of depreciation None +
8. Understatement of depreciation None -

AFAR-01B Page 2 of 10
ADVANCED FINANCIAL ACCOUNTING AND REPORTING 
Accounting for Special Transactions PARTNERSHIP OPERATIONS

PRACTICAL ADVANCED FINANCIAL ACCOUNTING

Part 1. Discussion Problems

Problem 1B-1
Sean, Thorpe and Ula are partners in an accounting firm. Their capital account balances at year-end were: Sean,
₱50,000; Thorpe, ₱110,000; Velasco, ₱50,000. They share profits and losses on a 4:4:2 ratio, after the following
terms:

a. Partner Ula is to receive a bonus of 10% of net profit after bonus.

b. Interest of 10% shall be paid on that portion of a partner’s capital in excess of ₱100,000.
c. Salaries of ₱10,000 and ₱12,000 shall be paid to partners Sean and Ula, respectively.

1. Assuming a net profit of ₱44,000 for the year, the total profit share of Ula was:
a. ₱7,800 b. ₱16,800 c. ₱19,400 d. ₱19,800

2. Assuming a net profit of ₱22,000 for the year and that the partners agreed on the above order of profit-sharing
provisions, the total profit share of Ula was:
a. ₱4,400 b. ₱13,400 c. ₱18,400 d. ₱15,000

3. Assuming a net profit of ₱22,000 for the year and that the partners agreed on the above order of priority
provision, the total profit share of Ula was:
a. ₱15,000 b. ₱4,400 c. ₱24,600 d. ₱12,364

Problem 1B-2
On January 1, 2023, Junemar, Arwind, Marcio and Alex formed the Fear the Beer Trading, a partnership with
capital contributions as follows: Junemar, ₱150,000; Arwind, ₱75,000; Marcio, ₱75,000; and Alex, ₱60,000. The
partnership agreement stipulates that each partner shall receive a 5% interest on capital contributed and that
Junemar and Arwind shall receive salaries (chargeable as expenses of the business) of ₱15,000 and ₱9,000,
respectively. The agreement further provides that Marcio shall receive a minimum of ₱7,500 per annum and Alex
a minimum of ₱18,000, which is inclusive of amounts representing interest and their respective share in
partnership profits. The balance of the profits shall be distributed among the partners in the ratio of 3:3:2:2.

4. What amount must be earned by the partnership in fiscal year 2023, before any charge for interest and partners’
salaries, in order that Junemar may receive an aggregate of ₱37,500 including interest, salary and share of
profits?
a. ₱92,000 b. ₱97,000 c. ₱50,000 d. ₱90,000

5. The total profit share of Marcio is

a. ₱7,500 b. ₱13,750 c. ₱19,400 d. ₱37,500

6. The total profit share of Alex is

a. ₱13,000 b. ₱13,500 c. ₱18,000 d. ₱19,400

Problem 1B-3
On January 1, 2024, Ana, Bella, and Cara formed ABC Partnership with original capital contribution of P300,000,
P500,000, and P200,000. Ana is appointed as managing partner. During 2024, Ana, Bella, and Cara made
additional investments of P500,000, P200,000 and P300,000, respectively. At the end of 2024, Ana, Bella, and
Cara made drawings of P200,000, P100,000, and 400,000, respectively. At the end of 2024, the capital balance
of Cara is reported at P320,000.

The profit or loss agreement of the partners is provided below:

• 10% interest on original capital contribution of the partners.
• Semi-annual salary of P80,000 and P20,000 for Ana, and Bella, respectively.
• Bonus to Ana equivalent to 20% of net income after interest and salary to all partners.
• Remainder is to be divided equally among the partners.

7. What is Cara’s share in the partnership profit for the year-ended December 31, 2024?

AFAR-01B Page 3 of 10
ADVANCED FINANCIAL ACCOUNTING AND REPORTING 
Accounting for Special Transactions PARTNERSHIP OPERATIONS

a. ₱220,000 b. ₱180,000 c. ₱320,000 d. ₱120,000

8. What is the partnership profit for the year-ended December 31, 2024?
a. ₱960,000 b. ₱1,020,000 c. ₱1,050,000 d. ₱900,000

9. What is the bonus given to Ana as managing partner for the year-ended December 31, 2024?
a. ₱150,000 b. ₱120,000 c. ₱60,000 d. ₱100,000

10. What is the capital balance of Bella on December 31, 2024?

a. ₱940,000 b. ₱890,000 c. ₱840,000 d. ₱850,000

Problem 1B-4
Jojo and Jawo are partners who share profits and losses in the ratio of 6:4, respectively. Jojo’s salary is ₱100,000
and Jawo is ₱50,000. The partners also are paid interest on their average capital balances. In 2024, Jojo received
₱50,000 interest and Jawo, ₱20,000. The profit and loss allocation is determined after deductions for the salary
and interest payments.

11. If Jawo’s total share of partnership income was ₱200,000 in 2024, what was the total partnership income?
a. ₱475,000 b. ₱500,000 c. ₱545,000 d. ₱750,000

Problem 1B-5
Canlas, a partner in 3C Partnership, has a 30% participation in partnership profits and losses. Canlas’ capital
account had a net decrease of ₱120,000 during the calendar year 2024. During the year, Canlas withdrew
₱260,000 (charged against his capital account) and contributed property valued at ₱50,000 to the partnership.

12. What was the net profit of the 3C Partnership?

a. ₱300,000 b. ₱466,667 c. ₱700,000 d. ₱1,100,000

Part 2: Quizzers

➔ Part 2.1 Theoretical Quizzer

1. Which of the following statements are incorrect?
a. If only the profit-sharing ratio has been agreed upon, the share of each partner in the losses shall be in
the same proportion of that ratio.
b. If no agreement as to profit/loss sharing has been agreed upon, the original capital balances shall be
used as the basis for division of the resulting income or loss of the operations.
c. The industrial partner shall not share in the losses of the partnership operations.
d. None of the above.

2. It is considered as the most just basis for allocating partnership profit or loss for the period.
a. Arbitrary ratio b. Equally c. Average capital d. Original capital

3. Statement 1. Capital withdrawal directly affects the capital account balance.

Statement 2. Personal withdrawal is initially recorded in a drawing account.

Which of the following statements is true?

a. Only statement 1 is correct. c. Both statements are correct.
b. Only statement 2 is correct. d. Both statements are incorrect.

4. Which of the withdrawal accounts must be included in the computation of weighted average capital balances?
Permanent Temporary
a. ✓ ✓
b. ✓ 
c.  
d.  ✓

5. Statement 1. Capital interest is a claim against partnership’s net assets as shown in the capital accounts.

AFAR-01B Page 4 of 10
ADVANCED FINANCIAL ACCOUNTING AND REPORTING 
Accounting for Special Transactions PARTNERSHIP OPERATIONS

Statement 2. Profit or loss interest is a determinant of how a partner’s capital is affected by the subsequent
result of partnership’s operations.

Which of the following statements is true?

a. Only statement 1 is correct. c. Both statements are correct.
b. Only statement 2 is correct. d. Both statements are incorrect.

6. Even with a resultant net loss, this/these incentive/s as agreed by the partners (written in the Article of
Partnership) may still be given to the recipient-partner.
Salary Interest Bonus
a. ✓ ✓ ✓
b. ✓ ✓ 
c.  ✓ 
d.   ✓

7. As a rule, conflicts between GAAP and partners’ agreement, the former always prevail.
a. True c. PFRS/PAS
b. latter d. conceptual framework

8. The partners share in partnership profits or losses in accordance with their partnership agreement. If there is
no stipulation on how the partners should share in profits or losses of the partnership
a. they should share equally.
b. they should let one of the partners decide unilaterally on how the profits should be divided among the
partners.
c. their respective shares would be in proportion to their contributions.
d. they should not share at all but donate their profits to the world.

➔ Part 2.2 Computational Quizzer

The next two questions are based on the following information:
Marc and Mikee formed M&M Partnership on January 1, 2023. The partners stipulated that there be an annual
salary allowances of ₱80,000 for Marc and ₱40,000 for Mikee.

During 2023, the partnership earned a profit of ₱100,000.

1. How much was the share of Marc if they share profits equally and losses on a 6:4 ratio?
a. ₱72,000 b. ₱68,000 c. ₱52,000 d. ₱32,000

2. How much is the share of Mikee if they share profits and losses equally?
a. ₱70,000 b. ₱52,000 c. ₱48,000 d. ₱30,000

3. Samson and Theus’ partnership agreement stipulates the following:

a. Annual salary of ₱20,000 to Samson.

b. 10% bonus to Samson based on net income after salaries and bonus.
c. Balance is shared on a 60:40 ratio.

If Theus’ share in the partnership net income for 2023 is ₱32,000, how much is the bonus to Samson?
a. ₱6,667 b. ₱7,333 c. ₱8,000 d. ₱12,000

4. Jolina, Karla and Lai are partners, sharing in partnership profits in the ratio of 2:3:4. Jolina, the managing
partner, is entitled to an annual salary of ₱80,000 and a 10% bonus on profit after deducting the salary but
before deducting the bonus. The partnership earned profit of ₱560,000. How much is the share of Jolina?
a. ₱214,400 b. ₱196,000 c. ₱224,000 d. ₱189,667

5. The partnership agreement of Tim, Manu and Tony stipulates the following:
• Tim, the managing partner, shall receive a bonus of 10% of profit.
• Each partner shall receive a 6% interest on average capital investments.
• Any remaining profit or loss shall be shared equally.

AFAR-01B Page 5 of 10
ADVANCED FINANCIAL ACCOUNTING AND REPORTING 
Accounting for Special Transactions PARTNERSHIP OPERATIONS

The average capital investments of the partners during the year were ₱80,000 for Tim, ₱50,000 for Manu, and
₱30,000 for Tony. The partnership earned profit of ₱100,000 during the period. How much was Tim’s share?
a. ₱23,800 b. ₱28,600 c. ₱29,800 d. ₱41,600

6. Ola and Peter formed a partnership on March 1, 2023. The partnership agreement stipulates the following:
• Monthly salary allowances of ₱10,000 for Ola and ₱6,000 for Peter. Salary allowances are to be
withdrawn by the partners throughout the period and are to be debited to their respective drawings
accounts.
• The partners share profits equally and losses on a 60:40 ratio.

During the period the partnership earned profit of ₱200,000 before salary allowances. How much is the share
of Peter in the partnership profit?
a. ₱120,000 b. ₱100,000 c. ₱80,000 d. ₱76,000

7. Anwar and Bakshi formed a partnership. The partnership agreement stipulates the following:
• Annual salary allowances of ₱100,000 for Anwar and ₱70,000 for Bakshi.
• Bonus to Anwar of 10% of profit after partner’s salaries and bonus.
• The partners share profits and losses on a 50:50 ratio.

During the period the partnership incurred loss of ₱500,000. How much is the share of Anwar in the
partnership results of operations during the period?
a. ₱280,000 loss b. ₱220,000 loss c. ₱265,000 loss d. ₱235,000 loss

8. Reaves is trying to decide whether to accept a salary of ₱40,000 or a salary of ₱25,000 plus a bonus of 10%
of profit after salaries and bonus, as a means of allocating profit among partners. Salaries traceable to the
other partners are estimated to be ₱100,000. What amount of profit would be necessary so that Reaves would
consider the choices to be equal?
a. ₱165,000 b. ₱265,000 c. ₱290,000 d. ₱305,000

The next two questions are based on the following information:

ABC Partnership was formed on January 1, 2023 by Axel, Berg and Cobb. The Articles of Partnership of Axel,
Berg and Cobb provides for the year-end allocation of net income in the following order:
• First, Axel is to receive 10% of net income up to ₱100,000 and 20% over ₱100,000.
• Second, Berg and Cobb each are to receive 5% of the remaining income over ₱150,000.
• The balance of income is to be allocated equally among the three partners.

For the second year, however, Cobb left the partnership on the beginning of the year triggering the revision of the
Articles of Partnership. For 2024, the Article now provides the following:
• First, Axel shall receive 10% of profit up to ₱200,000 and 20% over ₱200,000.
• Second, Berg shall receive 5% of the remaining profit over ₱300,000.
• Any remainder shall be shared equally.

9. The partnership’s 2023 net income was ₱250,000 before any allocations to partners. What amount should be
allocated to Axel?
a. ₱101,000 b. ₱103,000 c. ₱108,000 d. ₱110,000

10. The partnership earned ₱560,000 for 2024. How much is the share of Berg?
a. ₱321,800 b. ₱283,200 c. ₱231,800 d. ₱238,200

11. Randy and Silva are partners sharing profits and losses on a 60:40 ratio. Annual salaries are provided for
Randy and Silva amounting to ₱10,000 and ₱40,000, respectively. Furthermore, Randy is given 10% bonus
of net income after salaries. During 2023, the partnership incurred a loss of ₱20,000. This loss is before
deducting the ₱50,000 total salaries.

By what amount did Silva’s capital account change?

a. ₱12,000 increase b. ₱32,000 increase c. ₱12,000 decrease d. ₱32,000 decrease

AFAR-01B Page 6 of 10
ADVANCED FINANCIAL ACCOUNTING AND REPORTING 
Accounting for Special Transactions PARTNERSHIP OPERATIONS

12. Asa and Butterfield formed a partnership. The partnership agreement stipulates the following:
• Annual salary allowance of ₱40,000 for Asa.
• Interest of 10% on the weighted average capital balance of Butterfield.
• The partners share profits and losses in an 80:20 ratio.

During the period the partnership earned profit of ₱100,000.

The movements in Butterfield’s capital account are as follows:

Butterfield, Capital
60,000 beg.
Aug. 1 withdrawal 30,000 20,000 Mar. 31 additional investment
40,000 Oct. 1 additional investment
10,000 Dec. 1 additional investment
end. 100,000

How much is the share of Asa in the partnership profit?

a. ₱83,167 b. ₱82,200 c. ₱82,134 d. ₱78,667

13. Garcia and Henson formed a partnership on January 2, 2023 and agreed to share profits 90% and 10%,
respectively. Garcia contributed capital of ₱25,000. Henson contributed no capital but has a specialized
expertise and manages the firm full time. There were no withdrawals during the year. The partnership
agreement provides for the following:
• Capital accounts are to be credited annually with interest at 5% of beginning capital.
• Henson is to be paid a salary of ₱1,000 a month.
• Henson is to receive a bonus of 20% of income calculated before deducting his salary, bonus and
interest on capital account.
• The partnership 2023 income statement as follows:
Revenues ₱ 96,450
Expenses (including salary, interest, and bonus) 49,700
Net income ₱ 46,750

What is Henson’s 2023 bonus?

a. ₱11,688 b. ₱12,000 c. ₱15,000 d. ₱15,738

14. Sheldon first contributed ₱50,000 of capital into an existing partnership on March 1, 2023. On June 1, 2023,
said partner contributed another ₱20,000. On September 1, 2023, he withdrew ₱15,000 from the partnership.
Withdrawal in excess of ₱10,000 is charged to the partner’s capital account. What is the annual weighted
average capital balance of Partner Sheldon?
a. ₱60,000 b. ₱51,667 c. ₱48,333 d. ₱32,500

15. Duncan and Robinson formed a partnership. The partnership agreement stipulates the following:
• Duncan and Robinson shall maintain average investments of ₱400,000 and ₱600,000, respectively.
Interest on the excess or deficiency in a capital contribution is to be computed at 10% per annum.
• After interest allowances, the partners share profits and losses on a 60:40 ratio.

During the first six months of operations, the partnership incurred loss amounting to ₱240,000. The average
capital balances of the partners during this period were ₱480,000 and ₱440,000, respectively.

How much is the share of Duncan in the partnership loss?

a. ₱102,400 b. ₱107,400 c. ₱137,600 d. ₱142,300

16. Isla and Jax formed a partnership and began operations on March 1, 2023. Isla invested ₱400,000 cash while
Jax invested equipment with a book value of ₱1,200,000 and a fair value of ₱720,000. On August 31, 2023,
Isla invested additional cash of ₱80,000. The partnership agreement stipulates the following:
• Monthly salary allowances of ₱8,000 and ₱40,000 to Isla and Jax, respectively, recognized as
expenses.
• 20% bonus on profit before salaries and interest but after bonus to Jax.
• 12% annual interest on the beginning capital of Isla.

AFAR-01B Page 7 of 10
ADVANCED FINANCIAL ACCOUNTING AND REPORTING 
Accounting for Special Transactions PARTNERSHIP OPERATIONS

• Balance equally.

The monthly salaries are withdrawn by the partners at each month-end. The partnership earned profit of
₱840,000 during the period before deductions for bonus and interest.

How much is the ending balance of Jax’s capital account?

a. ₱910,000 b. ₱1,230,000 c. ₱1,630,000 d. ₱1,710,000

17. Bernales, a partner in the Majestic Partnership, has a 30% participation in partnership profits and losses.
Bernales’ capital account has a net decrease of ₱60,000 during the calendar year 2023. During 2023, Bernales
withdrew ₱130,000 (charged against his capital account) and contributed property valued at ₱25,000 to the
partnership. How much was the profit of Majestic Partnership in 2023?
a. ₱150,000 b. ₱233,333 c. ₱350,000 d. ₱550,000

18. Nelly, Odette, and Pele formed the NOP Partnership on January 2, 2023 contributing ₱100,000, ₱250,000 and
₱300,000 cash, respectively. In allocating the net income or loss, they agreed on the following:
• Quarterly salary allowances of ₱25,000 for Nelly and ₱5,000 for Odette.
• 10% interest on the beginning capital balance of Pele.
• The profit or loss ratio of Nelly, Odette and Pele is 40%, 40% and 20%, respectively.

In 2023, the partnership earned profit of ₱500,000. The difference between the amounts received by Nelly
and Odette is
a. ₱240,000. b. ₱160,000. c. ₱80,000. d. ₱60,000.

The next two questions are based on the following information:

Tan and Ube’s agreed to share profits and losses equally for the partnership that they established at the beginning
of 2023. They also provided the following annual salary allowance with an increase clause for the second year:

First Year Second Year

Tan.................................................. ₱080,000 ₱120,000
Ube................................................. 40,000 48,000

The partnership of Tan and Ube prepared the condensed income statement for 2023 and 2024:

2023 2024
Sales revenue ₱500,000 ₱900,000
Less: Cost of goods sold 360,000 500,000
Gross profit ₱140,000 ₱400,000
Less: Other operating expenses 40,000 40,000
Net income ₱100,000 ₱360,000

The net incomes are after salaries.

19. How much is the share of Ube in 2023 net income?

a. ₱130,000 b. ₱90,000 c. ₱70,000 d. ₱30,000

20. How much is the share Tan in 2024 net income?

a. ₱300,000 b. ₱228,000 c. ₱148,000 d. ₱128,000

21. Jesus and Kale share profits and losses of the partnership equally. During 2023, Jesus’ capital account has a
net increase of ₱50,000. Jesus made contributions of ₱10,000 and capital withdrawals of ₱60,000 during the
year. How much was the partnership profit for the year?
a. ₱180,000 b. ₱200,000 c. ₱210,000 d. ₱480,000

22. Hugh and Ike formed a partnership on January 1, 2023. They stipulated in their partnership contract the
following agreements:

a. Annual salary allowance of ₱100,000 for Hugh, the managing partner.

AFAR-01B Page 8 of 10
ADVANCED FINANCIAL ACCOUNTING AND REPORTING 
Accounting for Special Transactions PARTNERSHIP OPERATIONS

b. 10% bonus to Hugh after salaries but before deduction for the bonus.
c. The partners share in profits and losses equally.

The share of Hugh in the partnership profit during 2023 was ₱595,000, including a bonus of ₱90,000. How
much was the share of Ike?
a. ₱386,000 b. ₱398,000 c. ₱405,000 d. ₱504,000

23. Ace and Ben are partners in Six-string Co. Their partnership agreement states that Ace is entitled to an annual
salary of ₱100,000 and a bonus of 10% of profit after salary but before bonus. The remainder is shared in the
ratio of 7:2. Bens’s share in partnership profit for the year was ₱296,000. How much was Ace’s bonus?
a. ₱169,000 b. ₱152,000 c. ₱148,000 d. ₱145,348

24. Alfie and Beau’s partnership agreement provides the following:

• Annual salaries of ₱96,000 for Alfie and ₱60,000 for Beau.
• 10% bonus to Alfie, based on profit after salaries and bonus.
• P/L ratio of 60:40.

The partnership earned profit of ₱200,000 before salaries and bonus. Which of the following statements is
correct?
a. Alfie’ share is ₱124,000 greater than Beau’s share.
b. Beau’s share is ₱76,000 less than Alfie’s share.
c. Alfie’s share is ₱48,000 greater than Beau’s share.
d. Alfie and Beau have equal shares.

25. AB Partnership was formed on February 28, 2023. Partner A invested ₱150,000 cash while Partner B invested
land that he originally bought for ₱70,000 but has a current fair value of ₱180,000. B invested additional cash
of ₱60,000 on November 1, 2023. The partnership contract states the following:

A B
• Monthly salary (recognized as expenses and withdrawn periodically) 10,000 20,000
• Interest on beginning capital 12% p.a. 12% p.a.
• Bonus on profit before salaries and interest but after bonus 20%
• Remaining profit or loss 50% 50%

AB Partnership earned profit of ₱120,000 in 2023. What is the capital balance of B on December 31, 2023?
a. ₱243,500 b. ₱226,500 c. ₱254,600 d. ₱266,500

26. Partners Rob and Sue share in profits and losses on a 70:30 ratio after salary allowances of ₱80,000 for Rob
and ₱40,000 for Sue. The business earned profit of ₱320,000 before deduction for the salaries. When closing
the income summary account,
a. Rob’s capital account would be credited for ₱120,000.
b. Rob’s capital account would be debited for ₱220,000.
c. Sue’s capital account would be credited for ₱100,000.
d. Sue’s capital account would be credited for ₱240,000.

27. Nana and Odia formed a partnership in 2023. The partnership contract stipulates the following:
• ₱30,000 annual salary to each partner due at each year-end.
• Bonus of 10% of profit after salaries and bonus for Nana.
• 8% interest on the partners’ weighted average capital balances.
• Any remaining profit or loss is divided equally.

The partnership’s ledger shows the following:

Nana, Capital
Date Ref. Debit Credit Balance
March 1, 2023 001 30,000.00 30,000.00
June 1, 2023 098 10,000.00 20,000.00

AFAR-01B Page 9 of 10
ADVANCED FINANCIAL ACCOUNTING AND REPORTING 
Accounting for Special Transactions PARTNERSHIP OPERATIONS

August 1, 2023 146 20,000.00 40,000.00

December 1, 2023 211 5,000.00 35,000.00

Odia, Capital
Date Ref. Debit Credit Balance
March 1, 2023 001 20,000.00 20,000.00
June 1, 2023 098 10,000.00 10,000.00
August 1, 2023 146 2,000.00 8,000.00

The partnership’s profit, before salaries and bonus, in 2023 is ₱60,000. The partners agreed to receive full
annual salaries in 2023. How much is the share of Nana?
a. ₱30,684 b. ₱29,316 c. ₱32,772 d. ₱28,257

Opportunities don’t happen, you create them.

—Chris Grosser

AFAR-01B Page 10 of 10