Reference no: EM132746185

The partnership of Meliodas and Elizabeth begins its first year of operations with the following capital balances: Meliodas, P560,000; Elizabeth, P280,000. According to the partnership agreement, all profits will be distributed as follows:

• Meliodas will be allowed a salary of P672,000 and P336,000 to Elizabeth * The partners will be allowed with interest equal to 10% of the beginning capital balance of the year.
• Meliodas will be allowed a bonus of 10% of the net income after bonus. The remainder will be divided on the basis of the beginning capital for the first year and equally for the second year
• Each partner is allowed to withdraw up to P28,000 per year. Assume that the income summary has a debit balance of P42,000 on the first year and a credit balance of P154.000 on the second year Assume further that each partner withdraws the maximum amount from the business each period.

Problem 1. What is the balance of Meliodas capital account at the end of the first year?

Problem 2. what is the balance of Elizabeth's capital account at the end of the second point year?