10. Bagcal and Cabatuan was organized and began operations on March 12020. On that date, Bagcal invested P337,500, and Cabatuan investedcomputer equipments with current fair values of 405,000. Cabatuan alsoinvested P135,000 cash in the partnership on November 1, 2020, becauseof its shortage of cash. The partnership contract includes the followingremuneration plan:BagcalCabatuanAnnual salary (recognized as operating expense) P40,500 P54,000Annual interest on average capital10%10%Remainder60%40%The annual salary was to be withdrawn by each partner in 12 monthlyinstallments.During the year ended February 28, 2021, the partnership had net sales ofP1,125,000, cost of goods sold of P630,000, and total operating expenses ofP225,000 (including partners' salaries expense but excluding interest onpartners' average capital account balances). Each partner made monthlycash drawings in accordance with the partnership contract.What are the capital balances of the partners on February 28, 2021?Bagcala. P486,000 P661,500b. P445,500 P607,500c. P526,500 P715,500d. P405,000 P553,500Cabatuan

Partnership means where two or more person comes together to do some common business activity and…

Answered: 10. Bagcal and Cabatuan was organized…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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R and S were organized and began operations on March 1, 20x1. On that date, R invested P 150,000 and S invested computer equipment with current fair value of P180,000. Because of shortage of cash on November 1, 20x1 S invested additional cash of P60,000 in the partnership. The partnership contract includes the following remuneration plan: R S Monthly salary (recognized as expense) P10,000 P20,000 Annual interest on beginning capital 12% 12% Bonus on the net profit before salaries and interest but after bonus 20% - Balance Equally The salary was to be withdrawn by each partner in monthly installments. The partnership’s net profit for 2005 is P120,000. What are the capital balances of the partners on December 31, 20x1?
GWS and BCP organized the GB Partnership on January 1, 2018. The following entries were made in their capital accounts during 2018. Debit Credit GWS, Capital: January 1 April 1 October 1 P315,000 P105,000 175,000 Debit Credit ВСР, Саpital: January 1 March P413,000 1 September 1 November 1 52,500 105,000 94,500 Required: А. If the partnership profit for the year 2018 computed before salaries or interest is P217,000, determine its distribution between the partners under each of the following independent profit-sharing agreements: (1) Interest at 6% is allowed on average capital investments and the remainder of the profit is divided equally. (2) A salary of P126,000 is to be credited to BCP, 6% interest is allowed on each partner on his ending capital balance and the remainder of the profit in the ratio of 3:2. Salaries are allowed GWS and BCP in amounts of P119,000 and P133,000, respectively, and the remaining profit or resulting loss is divided in the ratio of average capital balance.…
On April 1, 2020, Lana, Brent and Marie formed LBM Partnership with original contributions ofP400,000, P100,000 and P500,000, respectively. The articles of co-partnership provides that profit orloss shall be distributed under the following terms:• Lana, Brent and Marie shall be entitiled to monthly salaries of P1,000, P2,000 and P3,000 eachrespectively.• 10% return on the original capital contribution.• As managing partner, Brent shall receive bonus equal to 20% of net income after salaries andinterest but before bonus.• The remainder shall be distributed on the basis of original capital ratio.During the year, the partners regularly withdraw 1⁄4 of their monthly salary. The December 31, 2020statement of financial position of LBM Partnership shows that the capital balance of Lana is P531,080.What is the share of Brent in the partnership net income?A. 108,038.75 C. 105,820B. 106,070 D. 103,195
In the January 1, 2020 Kalaw and Borromeo formed partnership with each contributing the following: Kalaw Borromeo Cash 50,000 70,000 Equipments 50,000 75,000 Building 225,000 Furniture 10,000 Accounts payable 20,000 Loans Payable 100,000 All liabilities are to be assumed by the partnership. The partners agreed the equipments should be provided a 20% depreciation and the building has a market value of 200,000. The value of the furniture should be decreased by P2,000 There is an unrecorded liability in the books of Kalaw amounting to P2,000 and accrued interest on loans to Borromeo amounting to 5% of the loans. How much is the total capital of the partners before the agreed adjustments
On January 1, 2030, AAA, BBB, CCC and DDD formed ABCD Trading Co., a partnership with capital contributions as follows: AAA – P50,000; BBB – P25,000, CCC – P25,000 and DDD – P20,000. The partnership agreement stipulates that each partner shall receive a 5% interest on capital contributed and that AAA and BBB shall receive salaries of P5,000 and P3,000, respectively. The agreement further provides that CCC shall receive a minimum of P2,500 per annum and DDD, a minimum of P6,000 which is inclusive of amounts representing interest and their respective shares in partnership profits. The balance of the profits shall be distributed among AAA, BBB, CCC and DDD in the ratio of 3:3:2:2. 15. What amount must be earned by the partnership in 2030, before any charge for interest and partners’ salaries, in order that AAA may receive an aggregate of P12,500 including interest, salary and share of profits? A. P30,667 B. P32,333 C. P16,667 D. P30,000 16. RRR is trying to decide whether to accept a…
A and B formed a partnership on February 28, 2022 by contributing P430,000 and P570,000, respectively. The operations of the partnership for 2022 resulted to a profit of P375,000. Partners A and B agreed to the following allocation scheme: a. Weekly salary allowance of P1,000 is to be given to Partner A; b. 5% interest is to be credited to the partners; c. Bonus of 10% based on profit after salaries and interest to B. d. Residual income is to be allocated equally. How should the profit be allocated to A and B, respectively?
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 Question 5 If the profits are to be divided based on average capital, how much will be the share of AMMAR?
A and B formed a partnership and began operations on March 1, 20x1. A invested ₱400,000 cash while B invested equipment with a book value of ₱1,200,000 and a fair value of ₱720,000. On August 31, 20x1, A invested additional cash of ₱80,000. The partnership agreement stipulates the following: Monthly salary allowances of ₱8,000 and ₱40,000 to A and B, respectively, recognized as expenses. 20% bonus on profit before salaries and interest but after bonus to B. 12% annual interest on the beginning capital of A. 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 B’s capital account?
AB Partnership’s operation for the year 2022 resulted in a profit of P240,000. Their profit sharing agreement provided the following: a. Salaries of P5,000 and P15,000 is to be given to A and B respectively; b. 10% of profit after salaries and bonus is to be given to Partner B; c. The balance is to be divided using the 7:3 ratio, respectively. How much profit is to be allocated to B?
On April 1, 2020, Lana, Brent and Marie formed LBM Partnership with original contributions of P400,000, P100,000 and P500,000, respectively. The articles of co-partnership provides that profit or loss shall be distributed under the following terms: • Lana, Brent and Marie shall be entitiled to monthly salaries of P1,000, P2,000 and P3,000 each respectively. • 10% return on the original capital contribution. • As managing partner, Brent shall receive bonus equal to 20% of net income after salaries and interest but before bonus. • The remainder shall be distributed on the basis of original capital ratio. During the year, the partners regularly withdraw 1⁄4 of their monthly salary. The December 31, 2020 statement of financial position of LBM Partnership shows that the capital balance of Lana is P531,080. What is the share of Brent in the partnership net income? A. 108,038.75 B. 106,070 C. 105,820 D. 103,195
AB Partnership's operation for the year 2022 resulted in a profit of P240,000. Their profit sharing agreement provided the following: a. Salaries of P5,000 and P15,000 is to be given to A and B respectively; fres A fr free b. 10% of profit after salaries and bonus is to be given to Partner B; c. The balance is to be divided using the 7:3 ratio, respectively. How much profit is to be allocated to B?
BC and DZ entered into a partnership on September 1, 2021 by investing the following assets: Use the following information for the next two questions: BC P 150,000 DZ Cash Merchandise Inventory P 450,000 Land 150,000 650,000 Building Furniture and Fixture 1,000,000 The agreement between BC and DZ provides that profits and losses are to be divided into 40% and 60% to BC and DZ, respectively. The partnership is to assume the P300,000 mortgage loan on the building. 1. If DZ is to receive a capital credit equal to his profit and loss ratio, how much cash must he invest? 2. Assuming the partnership agreement provides that the partners should initially have an equal interest in the partnership capital, what is DZ's capital upon partnership formation?

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