3. On January 1, 2021, John and Francis formed Astig Bikers Partnership organized to train prospective professional basketball players on how to shoot 3-pointer with splash. The articles of co-partnership provide that profit or loss shall be distributed accordingly: • 10% interest on average capital balance. • P50,000 and P100,000 quarterly salary for John and Francis, respectively. • The remainder shall be distributed in the ration of 3:2 for John and Francis, respectively. • The following transactions regarding the capital balance of the partners for year 2021 are provided: John, Capital Francis, Capital P 500,000 100,000 January 1, 2021 investment March 31, 2021 investment July 1, 2021 withdrawal September 30, 2021 withdrawal October 1, 2021 investment P1,000,000 (200,000) (200,000) 700,000 The chief accountant of the partnership reported net income of P1,000,000 for year 2021. What is the amount of net income allocated to John?

3. On January 1, 2021, John and Francis formed Astig Bikers Partnership organized to train prospective professional basketball players on how to shoot 3-pointer with splash. The articles of co-partnership provide that profit or loss shall be distributed accordingly: • 10% interest on average capital balance. • P50,000 and P100,000 quarterly salary for John and Francis, respectively. • The remainder shall be distributed in the ration of 3:2 for John and Francis, respectively. • The following transactions regarding the capital balance of the partners for year 2021 are provided: John, Capital Francis, Capital P 500,000 100,000 January 1, 2021 investment March 31, 2021 investment July 1, 2021 withdrawal September 30, 2021 withdrawal October 1, 2021 investment P1,000,000 (200,000) (200,000) 700,000 The chief accountant of the partnership reported net income of P1,000,000 for year 2021. What is the amount of net income allocated to John?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

On March 1, 2019, Joe and Kiks decides to combine their businesses to form a partnership. Statement of financial position on March 1 before the formation showed the following: Joe Kiks Cash P9,000 P 3,750 Accounts receivable 18,500 13,500 Inventories 30,000 19,500 Furniture and fixture (net) 30,000 9,000 Office equipment (net) 11,500 2,750 Prepaid expenses 6,375 3,000 Total P105,375 P51,500 Accounts payable P 45,750 P18,000 Capital 59,625 33,500 Total P105,375 P51,500 They…
Required information [The following information applies to the questions displayed below.] The partnership agreement of the G&P general partnership states that Gary will receive a guaranteed payment of $13,000, and that Gary and Prudence will share the remaining profits or losses in a 45/55 ratio. For year 1, the G&P partnership reports the following results: Sales revenue Gain on sale of land (§1231) Cost of goods sold Depreciation-MACRS Employee wages Cash charitable contributions Municipal bond interest Other expenses $ 70,000 8,000 (38,000) (9,000) (14,000) (3,000) 2,000 (2,000) Note: Negative amounts should be indicated by a minus sign. c. What do you believe Gary's share of self-employment income (loss) to be reported on his year 1 Schedule K-1 should be, assuming G&P is an LLC and Gary spends 2,000 hours per year working there full time? Self-employment income (loss)
Ivana, Eric, and Jerry form a partnership to develop land into commercial offices and rent them for a profit. Ivana contributes land with a fair market value of $1,200,000 and a $600,000 basis. Eric and Jerry each contribute $600,000 of cash. (a) Assume that Ivana is a 50% partner and that Eric and Jerry each are 25% partners. If the partnership earns $400,000 from operations in its first year and distributes the cash proportionately, does Ivana recognize any gain? (b) Pursuant to the written partnership agreement, the partnership pays Ivana $100,000 a year for six years, regardless of its income, as a guaranteed payment for capital. Alternatively, pursuant to the partnership agreement, the partnership allocates and distributes the first $100,000 of income exclusively to Ivana for six years. Assume that the highest applicable federal rate for all years equals 8%. Does Ivana recognize any gain?
Required information [The following information applies to the questions displayed below.] Ramer and Knox began a partnership by investing $88,000 and $132,000, respectively. During its first year, the partnership earned $255,000. Prepare calculations showing how the $255,000 income is allocated under each separate plan for sharing income and loss. 3. The partners agreed to share income by giving a $69,000 per year salary allowance to Ramer, a $43,000 per year salary allowance to Knox, 10% interest on their initial capital investments, and the remaining balance shared equally. Net income is $255,000. Note: Enter all allowances as positive values. Enter losses as negative values. Net Income Salary allowances Interest allowances Total salary and interest Balance of income Balance allocated equally Balance of income Shares of the partners Ramer Saved Knox Total
Cc. 187.
On July 1, 2020, Wency and William agreed to form a partnership from their respective proprietorship businesses and to share profits equally. Wency and William’s balance sheet before the formation were: Wency William Cash P 6,000 P 15,000 Accounts receivable 36,000 21,000 Merchandise inventory 99,000 126,000 Prepaid rent 12,000 Store equipment 120,000 90,000 Accum. Depreciation ( 45,000) ( 54,000) Building 375,000 Accum. Depreciation (75,000) Land 180,000 - Totals P 696,000 P 210,000 Accounts payable P 22,500 P 9,000 Mortgage payable 180,000 - Capital 493,500 201,000 Totals P 696,000 P 210,000 The fair values of Wency’s and William’s assets were: Wency William Merchandise inventory P 81,000 P 135,000 Prepaid rent - 0 Store equipment 45,000 19,500 Building 750,000 -…
Jhumpa, Stewart, and Kelly are all one-third partners in the capital and profits of Firewalker General Partnership. In addition to their normal share of the partnership's annual income, Jhumpa and Stewart each receive an annual guaranteed payment of $10,000 to compensate them for additional services they provide. Firewalker's income statement for the current year reflects the following revenues and expenses: Sales revenue $340,000 Interest income 3,300 Long-term capital gains 1,200 Cost of goods sold (120,000) Employee wages (75,000) Depreciation expense (28,000) Guaranteed payments (20,000) Miscellaneous expenses (4,500) Overall net income $97,000 (Leave no answer blank. Enter zero if applicable.) b. How will it allocate these amounts to its partners? (Round your intermediate calculations and final answers to the nearest whole dollar amount.) Description Jhumpa Stewart Kelly Ordinary…
Nancy and Betty enter into a partnership agreement whereby they undertake to share profits according to the following rules: (a) Nancy and Betty will receive a salary of $1,400 and $11,500 respectively. (b) The next allocation is based on 10% of the partner's capital balances. (c) Any remaining profit or loss is to be borne completely by Betty. The partnership's profit for the first year is $40,000. Nancy's capital balance is $88,000 and Betty's capital balance is $12,000 as at the end of the year. Calculate the share of profit/loss to be borne by Betty. Select one: a. $29,800 O b. $9,000 O c. $1,000 O d. $10,200
Based on the above information, kindly answer the following: 1. In the profit distribution schedule, the salary allowance of Tom will be? 2. Of the P1,404,000 net profit of the partnership, the share of Rey will be? 3. In the profit distribution schedule, the total salary allowance will be? Please answer complete required1,2,3
On June 1, 2020, Jill Bow and Aisha Adams formed a partnership to open a gluten-free commercial bakery, contributing $298,000 cash and $396,000 of equipment, respectively. The partnership also assumed responsibility for a $58,000 note payable associated with the equipment. The partners agreed to share profits as follows: Bow is to receive an annual salary allowance of $168,000, both are to receive an annual interest allowance of 5% of their original capital investments, and any remaining profit or loss is to be shared 40/60 (to Bow and Adams, respectively). On November 20, 2020, Adams withdrew cash of $118,000. At year-end, May 31, 2021, the Income Summary account had a credit balance of $560,000. On June 1, 2021, Peter Williams invested $138,000 and was admitted to the partnership for a 20% interest in equity. Required: 1. Prepare journal entries for the following dates. a. June 1, 2020 b. November 20, 2020 c. May 31, 2021 d. June 1, 2021 2. Calculate the balance in each…
4. On July 1, 2020, Kyla and Niza formed Fashion and Style Partnership organized to train young fashion designers and help them gain confidence in their career with an initial investment of P1,000,000 and P2,000,000, respectively. Kyla is appointed as the managing partner. The articles of co-partnership provides that profit or loss shall be distributed accordingly: o 30% interest on original capital contribution ratio o Monthly salary of P20,000 and P10,000 respectively for Kyla and Niza. o Kyla shall be entitled to bonus equivalent to 20% of net income after interest, salary and bonus. o The remainder shall be distributed in the ratio of 3:2 for Kyla and Niza respectively For the year ended December 31, 2020, the partnership reported net income of P750,000. a. What is the share of Kyla in the net income of the partnership? b. What is the share of Niza in the net income of the partnership assuming the bonus is based on net income after interest and salary but before bonus?
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