Problem 1At the end of the its first year of operations on December 31, 2020, HEART ATTACK Company'saccounts show the following:CapitalP 48,000P 30,000P 25,000PartnerDrawingsMr. ChicharonP 23,000P 14,000P 10,000Mr. BulaloMr. L. KawaliThe capital balances represents each partner's initial capital investment. Therefore, net incomeor net loss for 2020 has not been closed to the partners' capital accounts.Instructions:a. Journalize the entry to record the division of net income for the year 2020 under each of thefollowing independent assumptions.1. Net income is P 30,000. Income is shared 6:3:12. Net income is P 40,000, Mr. Chicharon and Mr. Bulalo are given salary allowances of P 15,000and P 10,000, respectively. The remainder is shared equally.3. Net income is P 19,000. Each partner is allowed interest of 10% on beginning capitalbalances. Mr. Chicharon is given a P 15,0000 salary allowance. The remainder is shared equallyb. Prepare a schedule showing the division of net income under assumption (3) above.c. Prepare a partner's capital statement for the yar under assumptions (3) above.

Answered: Problem 1 At the end of the its first…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

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Problem 1Q

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Problem 1 At the end of the its first year of operations on December 31, 2020, HEART ATTACK Company's accounts show the following: Partner Mr. Chicharon Mr. Bulalo Mr. L. Kawali Drawings P 23,000 P 14,000 P 10,000 Capital P 48,000 P 30,000 P 25,000 The capital balances represents each partner's initial capital investment. Therefore, net income or net loss for 2020 has not been closed to the partners' capital accounts. Instructions: a. Journalize the entry to record the division of net income for the year 2020 under each of the following independent assumptions. 1. Net income is P 30,000. Income is shared 6:3:1 2. Net income is P 40,000, Mr. Chicharon and Mr. Bulalo are given salary allowances of P 15,000 and P 10,000, respectively. The remainder is shared equally. 3. Net income is P 19,000. Each partner is allowed interest of 10% on beginning capital balances. Mr. Chicharon is given a P 15,0000 salary…
SCORE: NAME: PROFESSOR: SECTION: Multiple Choice for Manongsong of P80,000 per annum. Profit for 2019 was P840,000 and the end balances on partners' capital accountsS are as follows: Ceradoy, P200 Manongsong, P150,000 and Anuran, P120,000. residual profits for 2019? ve a. P120,400 b. P126,670 C. P130,000 d. P140,000 2. Malaluan and Baral are in partnership. They share profits in the ratio 3:2 and close their accounts on June 30 each year.On Jan. 1, 2019, Castro joined the partnershin The profit-sharing ratio was revised to become Malaluan 50%, Baral 25% and Castro 25%, after providing for annual salaries as follows: Baral, P20,000 and Castro P12,000. The partnership profit for the year ended June 30, 2019 was P480,000. accruing evenly over the year. What are the partners' total share in profits for the year ended June 30, 2019? Malaluan Baral Castro a. P162,000 000's 000 b. d. P264,000 P156,000 3. Refozar, Martinez and Magsino formed a partnership. It's on a calendar year basis. The…
X&Y are Partners Jan or Initial Capital 01 March 30 Addl. Capital June 30 withdrawal Agreements. Int. on Ave. cape 10% Salary allow, y, 200k 9, 100 Remainder X, 60% Y₁ 40%% Propit for the year $1,200,000. X $ 800.000 $400,000 100.000 50.000 Required. Compute the FF. I. Ave. Cap.oF 2. lust-on Ave. cap. X 3. Share on balapter Salaries & Int. X 4. Total Share X
17. The following information relates to XXX and YYY’s partners capital accounts for fiscalyear ending June 30: XXXX YYY Balance, July 1 P86,400 P115,200 Add: Additional investment, January 1 38,400 19,200 Net Income for the year: Salaries 20,500 14,500 Interest 7,920 9,360 Bonus 3,720 Remainder 14,880 9,920 Total 171,820 168,180 Deduct: Drawings Monthly amounts 15,070 15,060 Additional drawings, June 30 2,400 403 Balance, June 30 154,350 152,717 Bonus is based on net income after salaries, interest and bonus. If the net income remains the same the following fiscal year, and there is no change in the partnership agreement nor any additional investment, how much will be YYY’s total share of the net income in the following year? A. P33,577 B. P33,780 C. P33,874 D. P33,696
Problem #3 SCORE: PROFESSOR Rules for the Distribution of Profits or Losses Elisa Diar and Ma. Concepcion Manalo formed a partnership, investing P330,000 and P110,000, respectively. Determine the partners' participation in the 2019 profit of P420,000 under each of the following independent assumptions: E. Interest at the rate of 8% allowed on original investments and the remainder divided in the ratio of 2:3. d. Salary allowances of P50,000 and P70,000, respectively, and the balance to be divided equally e. Allowance of interest at the rate of 8% on inal investments, salary allowances P50,000 and P70,000, respectively, and the remainder to be divided equally
The following information relates to partner for the year ended 29 February 2020: Current account credit balance on 29 February 2020 20 000 Profit share 50 000 Salaries 180 000 Interest on capital 24 000 Drawings 220 000 Interest on drawings 2 000 What is the balance in the Current account of the partner on 01 March 2019? OA. R12 000 DR. B. R116 00O DR OC. R52 000 CR D. R12 000 CR S Type here to search
Prablam ABC Patnershp was formed in year 2021 aunt setore datrouton of prott and loss. the followng accounts appeared in the books of the panmership the end eof year 2021 A capital 31 5,000 1 75,000 TO1 1 115.000 B. capital 20 000 V1 30 90,000 60,000 C, capital V T 25 |01 100,000 Revenue and epense summary 240.00 X If profits ore divided os follous, whaot is the share of A?" a. An 8% interest is given to each partners' average capital. b. Partners A and 6 will receive P2,500 monthly salary while partners C will receive P3,000 monthly c. 10% bonus based on income after salaries, interest and bonus is given to partner A d. Residual income is divided equally.
↓ A アレ AU ✓ 2 1. Lalit, Madhur and Neena were partner's sharing profits as 50%, 30% and 20% respectively. On 31st December, 2020 their balance sheet was as follows Balance Sheet Liabilities Creditors Reserve Fund Capital A/cs Lalit Madhur Neena Amount (RO) 28.000 10,000 50,000 40.000 25.000 Class Ac 153,000 Assets Cash Debtors Stock Investments Building Profit and Loss A/c Amount (RO) 34.000 44000 15,000 40,000 10,000 10,000 1553,000 On this date, Madhur retired and Lalit and Neena agreed to continue on the following terms 1. The goodwill of the firm was valued at RO 51,000. 2. There was an unrecorded liability to the extent of RO 6,000 3. Investments were brought down to RO 15,000. 4. Provision for bad debts was 5% on debtors. 5. Madhur was paid RO 10,300 in cash and the balance was transferred to his loan account 6. Prepare revaluation account and partners' capital accounts
PROBLEM G: On December 31, 2019, the statement of financial position of BRY Partnership shows the following data with profit or loss sharing ratio of 2:3:5: Cash P1,500,000 Liabilities to outside creditors В, Сарital R, Capital Y, Capital P2,000,000 1,500,000 1,250,000 750,000 Non-cash asset 4,000,000 On January 1, 2020, the partners decided to wind up the partnership affairs. During January, non-cash assets with book value of P3,000,000 were sold for P2,000,000 and liquidation expenses amounting to P200,000 were paid. 40% of total liabilities were also paid during January. P300,000 cash was withheld during January for future liquidation expenses. 8. What is the amount received by partner R on January 31, 2020? A. 200,000 B. 380,000 C. 500,000 D. 890,000
Question 6 For the year 2021, the partnership of AMMAR and BANU realized a net profit of P240,000. The capital accounts of the partners show the following postings: Jan. 1 May 1 July 1 Aug. 1 Oct. 1 AMMAR Debit Credit Debit Credit 20,000 10,000 120,000 BANU 10,000 10,000 5,000 80,000 20,000
Problem #4 Admission by Investment of Assets Resulta and Magpantay are partners sharing profits on a 60:40 ratio. A statement of financial position prepared for the partners on April 1, 2019 follows: Cash P 480,000 Accounts Payable P 890,000 1,330,000 Accounts Receivable 920,000 1,650,000 Resulta, Capital Inventories Magpantay, Capital 1,080,000 Equipment P700,000 Less: Accumulated Depreciation 450,000 250,000 P3,300,000 Total Assets Total Liabilities & Capital P3,300,000 On this date, the partners agreed to admit Tria as a partner. The terms of the agreement are summarized below: Assets and liabilities are to be restated as follows: a. An allowance for possible uncollectibles of P45,000 is to be established. b. Inventories are to be restated at their present replacement value of P1,700,000. C. Accrued expenses of P40,000 are to be recognized. Resulta, Magpantay and Tria will divide profits in the ratio of 5:3:2. Capital balances of the partners after the formation of the new…
The capital accounts of Scott and Tucker at the end of the fiscal year 2019 are as follows: Scott, Capital January 1 Balance P210,000 Мay 1 Investment 90,000 October 1 Withdrawal Р60,000 Tucker, Capital January 1 Balance P150,000 April 1 Withdrawal P30,000 The partnership profit for the year ended December 31, 2019 was P300,000. Instruction: Prepare schedule of profit allocation and journal entries to record transfer to profit to the capital accounts under each of the following independent assumptions: 1. Profit is divided 60% to Scott and 40% to Tucker. 2. Profit is divided into ratio of capital balances at the beginning of the period. 3. Profit is divided in the ratio of average capital balance. Interest of 8% is allowed on the average capital and the balance of profit is divided equally. 4. Salaries of P60,000 and P48,000 are allowed to Scott and Tucker, respectively, and the balance of the profit is divided in the ratio of capital balances at the end of the period. 5. 6. Scott is…

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