P and Q are in partnership sharing profit equally.
On 30 june 2015 R joined the partnership and it was agreed that from that date all three partners should share equally in profit. In the year ended 2015 the profit amounted to $300000, accruing evenly over the year, after charging an irrecoverable debt of $30000 which it was agreed should be borne equally by P& Q only .
what should P’s total profit share be for the year ended 31 December 2015?
-Please help me to solve this problem!
profit till 30 jun 150,000 P= 75, Q=75
profit till 31 dec 150,000 P=50, Q=50, R=50
p’s profit = 75+50=125
net profit of p= 125-30
hope that helps
The profit for the year, before the debt write-off = 330,000 or 165,000 per 6 months.
1st 6 months, bears all the debt write-off, so profits = 165,000 – 30,000 = 135,000, of which P and Q each get 50%, or $67,500
2nd 6 months, 165,000 shared equally between P, Q and R so 55,000 each.
P’s total share = 67,500 + 55,000 = 122,500
[Check: P 122,500, Q, 122,500 R 55,000. Total = 300,000, total profits]
i am sorry not to have read this question carefully.
can you explain it please that why you added Bed-Debts in to the net profit?
As Bed debt is an expense and it is deducted before net profit and it is mention in the question that after charging the bed debts of $30000…..explain it a little please Gromit.
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