Exercise 3: Use the following information for the next two cases: A&B Partnership earns profit of $240,000 in 20x1. The movements in the capital accounts of the partners are shown below: Jan. 1 May 1 July 1 Aug. 1 Oct. 1 DT. 20,000 10,000 A, capital Cr. 120,000 10,000 Dr. B, capital 10,000 5,000 CT. 80,000 20,000 Case #1: Compute for the partners' respective shares if profits are to be divided based on average capital. Case #2: Compute for the partners' respective shares if the partners are entitled to 20% interest on the ending balances of their capital accounts and any remainder is shared equally.

Exercise 3: Use the following information for the next two cases: A&B Partnership earns profit of $240,000 in 20x1. The movements in the capital accounts of the partners are shown below: Jan. 1 May 1 July 1 Aug. 1 Oct. 1 DT. 20,000 10,000 A, capital Cr. 120,000 10,000 Dr. B, capital 10,000 5,000 CT. 80,000 20,000 Case #1: Compute for the partners' respective shares if profits are to be divided based on average capital. Case #2: Compute for the partners' respective shares if the partners are entitled to 20% interest on the ending balances of their capital accounts and any remainder is shared equally.

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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2. The capital balances of partners Po and Gi are as follows:Po GiJanuary 1, Beginning P100,000 P200,000June 30, investment 50,000 -September 30, withdrawal - (100,000)Balance P150,000 P100,000Their agreement is to share profit and loss based on average capital balance. How muchis the share of Gi in the partnership’s income of P450,000?
Exercise 3-2 (Division of Profit; Interest on Average Capital) Danica and Jenson are partners. Their capital accounts during the fiscal year 2019 were as follows: Danica, Capital 120,000 1/1 800,000 4/1 160,000 60,000 J enson. Capital 3/1 180,000 1/1 1,200,000 7/1 9/1 140,000 11/1 10/1 100,000 Profit of the partnership is P250,000 for the year. Determine the partners shared profit under the following assumptions: 1. Each partner is to be credited 12% interest on his average capital. 2. Any remaining profit or loss is to be divided equally. Follow the instructions strictly
Exercise 3-2 (Division of Profit; Interest on Average Capital) Danica and Jenson are partners. Their capital accounts during the fiscal year 2019 were as follows: Danica, Capital 120,000 1/1 800,000 4/1 160,000 11/1 60,000 J enson. Capital 3/1 180,000 1/1 1,200,000 7/1 9/1 140,000 100,000 10/1 Profit of the partnership is P250,000 for the year. Determine the partners shared profit under the following assumptions: 1. Each partner is to be credited 12% interest on his average capital. 2. Any remaining profit or loss is to be divided equally. Follow thle instructions strictly
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Requirement: Compute for the respective shares of the partners in | shared equally, while losses on a 70:30 ratio. The partnership PROBLEM 3: EXERCISES 1. Partners A and B share in profits and los es on a 70:30 ratio after salaries of P80,000 for A and P40,000 or B. The business earned profit of P180,000 before deduction or the salaries. Requirements: a. Compute for the partners' respective share in the profit. b. Provide the journal entries (the salar are withdrawn periodically). for annual salary 2. A and B's partnership agreement provi allowances of P160,000 for A and P80, for B. Profits are earned profit of P200,000. Reguirement: Compute for the respective shares of the partners in the profit.
Show Your Solutions 1) The following condensed Balance Sheet was prepared for Bi, Na, Ta partnership on March 31,200B: Cash P 30,000 Liabilities P 60,000 Other Assets P 190,000 Bi, Capital P 44,000 Na, Capital P 66,000 Ta, Capital P 50,000 P 220,000 P 220,000 The other assets were sold for P50,000. Profits are shared 4;4;2, for Bi, Na, and Ta, respectively. Bi is insolvent . The amount of cash received by Na was: 2) After the realization of non-cash assets, the following account balances appeared in the genera ledger of the partnership of See, Chap, and Pooh. Cash P 10,000 Liabilities 30,000 Pooh,Loan 5,000 See,Capital 15,000 Chap,Capital 10,000 Pooh,Capital 10,000 Profits are shared 2:4:4 for See, Chapand Pooh, respectively. Pooh is insolvent. How much was the loss on realization? 3) After realization…
4. A, B, C, and D are partners, sharing earning in the ratio of 3/21, 4/21, 6/21, and 8/21, respectively. The balances of their capital accounts on December 31, 20x1 are as follows: A B C D P1,000 25,000 25,000 9,000 P60,000 The partners decide to liquidate, and they accordingly convert the on-cash assets into P23,200 cash. After paying the liabilities amounting to $3,000, they have P22,000 to divide. Assume that a debit balance of any partner's capital is uncollectible. The share of B in the cash distribution to the partners was: (round-off answer)
Problem V The balance sheet for the partnership of JJ, CC and TT, whose shares of profit and losses are 40,50, and 10 percent is as follows: Cash............... Inventory ....................... P 50,0000 360,000 Accounts Payable JJ, Capital CC, Capital TT, Capital...... Total liabilities and capital JJ сс IT a. P 56,000; P 70,000; P 14,000 b. P 16,000; P 20,000; P 4,000 Total assets.... P 410,000 The partnership will be liquidated in installments. As cash becomes available, it will be distributed to partners. If inventory costing P200,000 is sold for P140,000, how much cash should be distributed to each partners at this time? JJ сс C. P 32,000; Po; d. P 20,000; Po; P 150,000 . 160,000 TT P 8,000 P 20,000 45,000 55,000 P 410,000
3. The following are shown in the capital accounts of partners AA, BB, and CC in a year: AA BB CC Capital, January 1 Investment, June 1 Investment, October 1 P200,000 100,000 P300,000 P250,000 50,000 If the partnership has a net income of P500,000 for the year, distribute the net income on the basis of ending capital balances. Solution:
k The Pen, Evan, and Torves Partnership has asked you to assist in winding-up its business affairs. You compile the following information: 1. The partnership's trial balance on June 30, 20X1, is Cash Accounts Receivable (net) Inventory Plant and Equipment (net) Accounts Payable Pen, Capital Evan, Capital Torves, Capital Total Profit and loss percentages Preliquidation capital balances Loss absorption potential (capital balances/loss percent) Decrease highest LAP to next highest Debit $ 7,808 34,000 24,808 99,908 Decrease LAPs to next highest: $ 164,908 2. The partners share profits and losses as follows: Pen, 50 percent; Evan, 25 percent; and Torves, 25 percent. 3. The partners are considering an offer of $110,000 for the firm's accounts receivable, inventory, and plant and equipment as of June 30. The $110,000 will be paid to creditors and the partners in installments, the number and amounts of which are to be negotiated. Required: Prepare a cash distribution plan as of June 30, 20X1,…
Item Nos. 17 and 18 are based on the following information: ebnismen orfT On December 31, 200C, the partnership of Hue and Teng realized a profit of P 225,000. The capital accounts of the partners showed the following debits and credits during 200C: 002 bes'200 Hue Teng March 1 credit P 20,000 P 50,000 July 1 debit 5411 25,000 August 1 credit 30,000 October 1 debit- 10,000 November 1 credit- 65,000 17. Assuming that the profit will be divided using the average capital, the share of Hue is: a. P 80,000. c. P 120,000. d. P 135,000. а. С. b. P 90,000. 000,008 nsw 18. If the profit will be divided equally after providing 12% interest on the opening capital, the share of Teng in the profit is: a. P 114,000. P 120,000. С. b. P 118,000. d. P 135,000. 00 000.009
The capital balances of the partners are presented to you before the retirement of X: X, P50,000; Y, P45,000; Z, P35,000. P/L ratio, equally. After the retirement of X, the capital balance of Z was P34,000. How much is the total capital after the retirement of X? A. P48,000 B. P80,000 C. P78,000 D. P52,000 The capital balances of the partners are presented to you before the retirement of Z: X, P60,000; Y, P55,000; Z, P45,000. P/L ratio, equally. After the retirement of Z, the capital balance of X was P57,500. How much is the capital of Y after the retirement of Z? A. P55,000 B. P57,500 C. P52,500 D. P115,000