COMPUTATION OF BONUS WITH
DIFFERENT SITUATIONS
Liboro, Fernandez and Palantino formed a
partnership on January 1, 2018 with capital
contributions of P300,000, P500,000 and
P200,000, respectively. For the year ended
December 31, 2018, the partnership reported net
income after tax of P455,000. Tax rate is 30%.
Their agreements are as follows:
• 5% Interest on initial capital contributions
• Annual Salaries of P30,000, P45,000 and P65,000
are given to Liboro, Fernandez, and Palantino,
respectively.
• Bonus to Liboro of 8% of ***
Bonus to Liboro of 8% of
1. Net income after tax but before salaries, interest and bonus
2. Net income after tax and salaries but before interest and bonus
3. Net income after tax, salaries, interest but before bonus
4. Net income after tax, salaries, interest and bonus
5. Net income after tax and bonus but before salaries and interest
6. Net income after tax, bonus and salaries but before interest
7. Net income before tax, salaries, interest and bonus
8. Net before tax and salaries but after interest and bonus
9. Net income before tax, salaries and interest but after bonus
10. Net income before tax but after salaries, interest and bonus
11. Net income before tax and bonus but after salaries and interest
12. Net income before tax, bonus and interest but after salaries
Bonus to Liboro of 8% of
1. Net income after tax but before salaries, interest and bonus
2. Net income after tax and salaries but before interest and bonus
3. Net income after tax, salaries, interest but before bonus
4. Net income after tax, salaries, interest and bonus
5. Net income after tax and bonus but before salaries and interest
6. Net income after tax, bonus and salaries but before interest
7. Net income before tax, salaries, interest and bonus
8. Net before tax and salaries but after interest and bonus
9. Net income before tax, salaries and interest but after bonus
10. Net income before tax but after salaries, interest and bonus
11. Net income before tax and bonus but after salaries and interest
12. Net income before tax, bonus and interest but after salaries
Requirement
• Using the 12 cases provided, compute for the
Bonus and Net Income allocation for Liboro,
Fernandez and Palantino.
• Also, provide for the Adjusted Capital
balances.
• Prepare Journal Entries for the NI distribution
using Indirect method.
• Prepare Journal Entries for the closing of
Drawing Accounts
Case #
Liboro Fernandez Palantino Total
Interest
Salary
Bonus *
Remainder
Remainder
Allocation ☺
NI
allocation
Beg. Capital
Balances
End. Capital
Balances
Net income after tax but before salaries, interest
and bonus
Bonus = 8% (455,000)
Bonus = 36,400
Net income after tax and salaries but before
interest and bonus
Bonus = 8%(455,000-140,000)
= 8%(315,000)
Bonus = 25,200
Net income after tax, salaries, interest but
before bonus
Bonus = 8%(455,000-140,000-50,000)
= 8%(265,000)
Bonus = 21,200
Net income after tax, salaries, interest and bonus
Bonus = 8%(455,000-140,000-50,000-B)
B = 8% (265,000-B)
B = 21,200 - .08B
1.08B = 21,200
1.08B = 21,200
1.08 1.08
Bonus = 19,630
Net income after tax and bonus but before
salaries and interest
Bonus = 8%(455,000-B)
= 36,400-.08B
1.08B = 36,400
1.08B = 36,400
1.08 1.08
Bonus = 33,704
Net income after tax, bonus and salaries but
before interest
Bonus = 8%(455,000-140,000-B)
= 8%(315,000-B)
= 25,200- .08B
1.08B = 25,200
1.08B = 25,200
1.08 1.08
Bonus = 23,333
Net income before tax, salaries, interest and
bonus
Bonus = 8%(455,000 +T)
= 8% (455,000 + (.3(455,000/.7))
= 8%(650,000)
Bonus = 52,000
Net before tax and salaries but after interest and
bonus
Bonus = 8%(455,000 +T -50,000-B)
= 8% (650,000-50,000-B)
= 8% (600,000-B)
= 48,000-.08B
1.08B = 48,000
1.08B = 48,000
1.08 1.08
Bonus = 44,444
Net income before tax, salaries and interest but
after bonus
Bonus = 8%(455,000 +T -B)
= 8%(650,000-B)
= 52,000-.08B
1.08B = 52,000
1.08B = 52,000
1.08 1.08
Bonus = 48,148
Net income before tax but after salaries, interest
and bonus
Bonus = 8%(455,000+T-140,000-50,000-B)
= 8% (650,000-140,000-50000-B)
= 8% (460,000-B)
= 36,800 - .08B
1.08B = 36,800
1.08B = 36,800
1.08 1.08
Bonus = 34,074
Net income before tax and bonus but after
salaries and interest
Bonus = 8%(455,000+T-140,000-50,000)
= 8% (650,000-140,000-50,000)
= 8%(460,000)
Bonus = 36,800
Net income before tax, bonus and interest but
after salaries
Bonus = 8%(455,000+T-140,000)
= 8%(650,000-140,000)
= 8%(510,000)
Bonus = 40,800
