18. Onate, Guillermo, and Cumagun are partners sharing profits on a 5:3:2 ratio. On Jan. 1, 2019, Aglugob was admitted into the partnership with a 10% share in profits. The old partners continue to participate in profits in their original ratio. For 2019, the profit of the partnership was reported as P12,500. However, it was discovered that the following items were omitted in the firm’s books: Unrecorded at year-end 2018 2019 Prepaid Expense P800 Accrued Expense P600 Unearned Income 700 Accrued Income 500 The new profit and loss ratio for Guillermo, and the share of partner Cumagun in the 2019 profit would be a. 30% and P2,214 b. 27% and P2,214 c. 27% and P2,286 d. 30% and P2,286 19. Perez, Yuzon, and Mercado formed a partnership on Jan. 1, 2019 with the following initial investments: Perez - P100,000 Yuzon - 150,000 Mercado - 225,000 The partnership agreement states that profits and losses are to be shared equally by the partners after consideration is made for the following: - Salaries allowed to partners: P60,000 for Perez, P48,000 for Yuzon, and P36,000 for Mercado. - Average partner’s capital balances during the year shall be allowed 10% interest. Additional information: - On June 30, 2019, Perez invested an additional P60,000. - Mercado withdrew P70,000 from the partnership on Sept. 30, 2019. - Share on the remaining partnership profits was P5,000 for each partner. The total partnership capital on Dec. 31, 2019 was a. P405,000 b. P671,500 c. P672,750 d. P480,000
Partnership Accounting
A partnership is a kind of arrangement between two or more people whereby they agree to manage the business operations and share its profits and losses in an agreed ratio between them. The agreement that is drafted and signed by the partners of the firm is termed as partnership deed and contains various important clauses agreed between the partners such as profit/loss sharing, interest on capital, remuneration allocation of each partner, drawings, admission of a new partner, etc.
Partner Admission and Withdrawal
A partnership is a kind of arrangement between two or more people whereby they agree to manage the business operations and share its profits and losses in an agreed ratio between them. The agreement that is drafted and signed by the partners of the firm is termed as a partnership deed and contains various important clauses agreed between the partners such as profit/loss sharing, interest on capital, remuneration allocation of each partner, drawings of a partner, etc.
18. Onate, Guillermo, and Cumagun are partners sharing profits on a 5:3:2 ratio. On Jan. 1, 2019,
Aglugob was admitted into the partnership with a 10% share in profits. The old partners continue to
participate in profits in their original ratio.
For 2019, the profit of the partnership was reported as P12,500. However, it was discovered that the
following items were omitted in the firm’s books:
Unrecorded at year-end 2018 2019
Prepaid Expense P800
Accrued Expense P600
Unearned Income 700
Accrued Income 500
The new
a. 30% and P2,214
b. 27% and P2,214
c. 27% and P2,286
d. 30% and P2,286
19. Perez, Yuzon, and Mercado formed a partnership on Jan. 1, 2019 with the following initial
investments:
Perez - P100,000
Yuzon - 150,000
Mercado - 225,000
The partnership agreement states that profits and losses are to be shared equally by the partners after
consideration is made for the following:
- Salaries allowed to partners: P60,000 for Perez, P48,000 for Yuzon, and P36,000 for Mercado.
- Average partner’s capital balances during the year shall be allowed 10% interest.
Additional information:
- On June 30, 2019, Perez invested an additional P60,000.
- Mercado withdrew P70,000 from the partnership on Sept. 30, 2019.
- Share on the remaining partnership profits was P5,000 for each partner.
The total partnership capital on Dec. 31, 2019 was
a. P405,000
b. P671,500
c. P672,750
d. P480,000
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