Rene, Michael, and Kevin are partners in an accounting firm. Their capital account balance at year-end were Rene, P90,000; Michael, P120,000; and Kevin, P160,000. They share profit and losses on a 4:4:2 ratio after considering the following terms: a. Kevin is to receive a bonus of 10% of net income. b. Interest of 5% shall be paid on partner’s capital. c. Salaries of P8,000 and P10,000 shall be paid to partners Rene and Kevin respectively. Assuming a net income of P84,000 for the year. REQUIRED: Prepare the following: A. Profit or Loss Distribution Table B. Corresponding JOURNAL ENTRY to distribute profit or

Rene, Michael, and Kevin are partners in an accounting firm. Their capital account balance at year-end were Rene, P90,000; Michael, P120,000; and Kevin, P160,000. They share profit and losses on a 4:4:2 ratio after considering the following terms: a. Kevin is to receive a bonus of 10% of net income. b. Interest of 5% shall be paid on partner’s capital. c. Salaries of P8,000 and P10,000 shall be paid to partners Rene and Kevin respectively. Assuming a net income of P84,000 for the year. REQUIRED: Prepare the following: A. Profit or Loss Distribution Table B. Corresponding JOURNAL ENTRY to distribute profit or

Financial Accounting

14th Edition

ISBN:9781305088436

Author:Carl Warren, Jim Reeve, Jonathan Duchac

Publisher:Carl Warren, Jim Reeve, Jonathan Duchac

Chapter12: Accounting For Partnerships And Limited Liability Companies

Section: Chapter Questions

Problem 9E

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Distribution of Profits and Losses: 2. Rene, Michael and Kevin are partners in an accounting firm. Their capital account balance at year-end were Rene, P90,000; Michael, P120,000; and Kevin, P160,000. They share profit and losses on a 4:4:2 ratio after considering the following terms: a. Kevin is to receive a bonus of 10% of net income. b. Interest of 5% shall be paid on partner's capital. c. Salaries of P8,000 and P10,000 shall be paid to partners Rene and Kevin respectively. Assuming a net income of P84,000 for the year. REQUIRED: Prepare the following: A. Profit or Loss Distribution Table B. Corresponding JOURNAL ENTRY to distribute profit or loss
3. Bunag, Belen, and Bustos are partners in an accounting firm. Their capital account balances at year-end were P180,000, P220,000, and P100,000, respectively. They share profits and losses on a 4:4:2, ratio respectively, after considering the following terms: a. Bustos is to receive a bonus of 10% of profit after deducting bonus b. Interest of 10% shall be paid on that portion of a partner’s capital in excessof P200,000. c. Salaries of P20,000 and P24,000 shall be paid to partners Bunag and Bustos,respectively. Assuming a profit of P220,000 for the year. REQUIRED: Prepare the following:A. Profit or Loss Distribution TableB. Corresponding JOURNAL ENTRY to distribute profit or loss
PJ, Ian, and Lemuel are partners in an accounting firm. Their capital account balances at year-end were PJ, P180,000; Ian, P220,000; and Lemuel, P100,000. They share profits and losses on a 4:4:2 ratio, after the following special terms: 1) Partner Ian is to receive a bonus of 10% of net income after the bonus. 2) Interests of 10% shall be paid on that portion of a partner's capital in excess of P200,000. 3) Salaries of P20,000 and P24,000 shall be paid to partners PJ and Lemuel, respectively. Assuming a net income of P88,000 for the year, the total profit share of partner Lemuel was:
A, B, and C are partners in an accounting firm. Their capital account balances at the year-end were A P120,000; B P140,000; C P80,000. They share profits and losses on a 3:3:4 ratio, after the following special terms: o Interest of 10% shall be paid on that portion of a partner's capital in excess of P100,000. • Quarterly salaries of P5,000, P5,000 and P6,000 shall be paid to partners A, B, and C, respectively. • Partner C is to receive a bonus of 10% of net income after salaries, interest and bonus. Assuming a net income of P60,000 for the year, the total profit share of partner C was:
A, B and C are partners in an accounting firm. Their capital account balances at year-end were: A, P90,000; B, P110,000; C, P50,000. They share profits and losses in a 4:4:2 ratio, after the following special terms:Partner C is to receive a bonus of 10% of the net income after the bonus.Interest of 10% shall be paid on that portion of a partner’s capital in excess of P100,000.Salaries of P10,000 and P12,000 shall be paid to partners A and C, respectively.Assuming a net income of P44,000 for the year, the total profit share of partner C would be: a. P7,800 b. P16,800 c. P19,400 d. P19,800 A local partnership has assets of cash of P5,000 and a building worth P80,000. All liabilities have been paid and the partners are all insolvent. The partners capital accounts are as follows Harry P40,000, Landers P30,000 and Waters 15,000. The partners share profits and losses 4:4:2. If the building is sold for P50,000, how much cash will Waters receive in the…
A, B and C are partners in the accounting firm. Their capital account balances at year end were:A - P 90,000B- P 110,000C- P 50,000.They share profits and losses in a 4:4:2 ratio, after the following special terms:1. Partner C is to receive a bonus of 10% of the net income after bonus.2. Interest of 10% shall be paid on that portion of a partner's capital in excess of P 100,0003. Salaries of P 10,000 and P 12,000 shall be paid to partners A and C, respectively.Assuming a net income of P 44,000 for the year, the total profit share of partner C would be:
A, B, and C are partners in an accounting firm. Their capital account balances at the year-end were A P120,000; B P140,000; C P80,000. They share profits and losses on a 3:3:4 ratio, after the following special terms: Interest of 10% shall be paid on that portion of a partner's capital in excess of P100,000. Quarterly salaries of P5,000, P5,000 and P6,000 shall be paid to partners A, B, and C, respectively. Partner C is to receive a bonus of 10% of net income after salaries, interest and bonus. Assuming a net income of P60,000 for the year, the total profit share of partner C was:
Required: 3. Prepare journal entry to record Pedro’s admission. 4. During the first year of operations, the partnership earned P650,000. After Pedro’s admission, the profitand loss sharing ratio is 40:40:20 for Juan, Pablo, and Pedro, respectively, based on capital credits.Drawings were made in these amounts: Juan, P100,000; Pablo, P130,000; Pedro – P56,000. What isthe capital balance of Pedro after the first year?
Distribution of Profits and Losses: 3. Bunag, Belen, and Bustos are partners in an accounting firm. Their capital account balances at year-end were P180,000, P220,000, and P100,000, respectively. They share profits and losses on a 4:4:2, ratio respectively, after considering the following terms: a. Bustos is to receive a bonus of 10% of profit after deducting bonus b. Interest of 10% shall be paid on that portion of a partner's capital in excess of P200,000. c. Salaries of P20,000 and P24,000 shall be paid to partners Bunag and Bustos, respectively. Assuming a profit of P220,000 for the year. REQUIRED: Prepare the following: A. Profit or Loss Distribution Table B. Corresponding JOURNAL ENTRY to distribute profit or loss
1. Say, Alittle and Prayer are partners in a furniture company. following profit and loss distributions; Their partnership agreement provides for the > Say, Alittle and Prayer are to receive salaries of P40,000, P36,000, and P13,650, respectively. Say is to receive a bonus equal to 10% of income before the bonus. Each partner is to receive 10% interest on the weighted average capital balance. Withdrawals are considered to be reduction of capital for purposes of interest calculations. > Any remaining profits of losses are to be divided equally among the partners. Capital balance information for 2006 is as follows: Alittle 6,000 Say 10,000 1,000 2,000 1,000 Prayer 40,000 2,000 15,000 Jan. 1, 2006 Withdrawal 4/1/06 Investment 7/1/06 Withdrawal 10/1/06 4,000 2,000 Prepare distribution of profit or loss table showing the required profit that will allow Say to withdraw P65,000 from said profit. 2. Ashe Company was organized on January 1, 2010, with authorized capital of 100,000 shares of…
Partners R and S receive a salary allowance of P3,000 and P7,000, respectively, and share the remainder equally. If the company earned P4,000 during the period, the entry to close the income or loss into their capital accounts is: a. Income Summary R, Capital S, Capital b. Income Summary S, Capital c. Income Summary R, Capital S, Capital d. Income Summary R, Capital S, Capital Ο Ο Ο Ο O A O D 10,000 4,000 14,000 6,000 3,000 7,000 4,000 7,000 7,000 3,000 3,000
2. Use the following information for the next three cases: The partnership agreement of A, B and C stipulates the following: Partners A and C shall receive annual salaries of P12,000 and P8,000, respectively. DA bonus of 10% of profit after salaries but before deduction of bonus shall be given to Partner A, the managing partner. Each partner shall receive 10% interest on average capital investments. TAny remaining profit or loss shall be shared as follows: 40% to A and 30% each to B and C. The average capital investments of partners during the year are as follows: AP100,000 B 60,000 C 120,000 Case #1: The partnership earns profit of P100,000. Requirement: Compute for the respective shares of the partners on the partnership profit. Case #2: The partnership earns profit of P10,000. Requirement: Compute for the respective shares of the partners on the partnership profit. Case #3: The partnership incurs loss of P20,000. Requirement: Compute for the respective shares of the partners on the…