14. The income summary of Cabatu and Dacua Partnership for the year endedDecember 31, 2020 show a net income of P140,000. The capital accounts ofthe partners for 2020 show the following:1. Cabatu began the year with a capital balance of P70,000.2. Dacua began the year with a capital balance of P175,000.3. On April 1, Cabatu invested additional P26,250 into the partnership.4. On August 1, Dacua invested additional P52,500 into the partnership.5. Throughout 2020, each partner withdrew P700 per week in anticipationof partnership net income. The partners agreed that these withdrawalsare not to be included in the computation of average capital balancesfor purposes of income distribution.Cabatu and Dacua have agreed to distribute partnership net incomeaccording to the following plan:CabatuDacuaInterest on average capital balancesBonuses on net income before salaries, but after10%10%25%Noneinterest and bonusesSalariesP43,750 P52,500Residual (if positive)Residual (if negative)70%30%50%50%What are the capital balances of the partners on December 31, 2020?Cabatua. P165,900 P294,350b.DacuaP76,650 P205,100C. P167,650 P296,100d. P131,250 P259,700

partners capital account prepare

Answered: 14. The income summary of Cabatu and…

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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Juan and Pedro’s partnership agreement shows that they will receive a salary of P 150,000 and P 100,000, respectively. Should there be a remainder, such will be divided based on their average capital balances. Below shows information in their respective capital balances:Juan, capital ending balance – P 3,000,000Debits: June 1 - P 500,000Credits: March 30 – P 1,000,000Credits: October 30 – P 500,000 Pedro, capital ending capital balance – P 4,500,000Credits: May 1 – P 1,000,000Credits: August 31 – P 1,000,000Income for the year amounted to P 300,000. How much profit will be distributed to Juan?
15. Rosemarie and Rose are partners sharing profits and losses in the ratio of 7:3 respectively. On February 14, 2020, their respective capital balances are as follows: Rosemarie: P 35, 000; Rose: P 30, 000. On that day, they agreed to admit Rosauro as partner with one third interest in the capital and profits and losses upon investment of P 25, 000. The new partnership will begin with a total capital of P 90, 000. Immediately after the admission of Rosauro, the capital balances of Rosemarie, Rose and Rosauro respectively must be: a. P 30, 000; P 30, 000; P 30, 000 b. P 31, 667; P 28, 333; P30, 000 c. P 31, 500; P 28, 500; P 30, 000 d. P 35, 000; P 25, 000; P 30, 000 e. answer not given
Keri & Nick Consulting’s partners’ equity accounts reflected the following balances on August 31, 2020: Keri Lee, Capital $ 85,000 Nick Kalpakian, Capital 209,000 Lee and Kalpakian share profit/losses in a 2:3 ratio, respectively. On September 1, 2020, Liam Court is admitted to the partnership with a cash investment of $126,000. Required: Prepare the journal entry to record the admission of Liam under each of the following unrelated assumptions, where he is given: a. A 30% interest in equity -Record the admission of new partner b. A 20% interest in equity -Record the admission of new partner c. A 50% interest in equity -Record the admission of new partner
Coburn (beginning capital, $56,000) and Webb (beginning capital $92,000) are partners. During 2022, the partnership earned net income of $69,000, and Coburn made drawings of $17,000 while Webb made drawings of $26,000. Assume the partnership income-sharing agreement calls for income to be divided with a salary of $37,000 to Coburn and $32,000 to Webb, interest of 12% on beginning capital, and the remainder divided 50%-50%. Prepare the journal entry to res the allocation of net income. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Account Titles and Explanation Debit Credit Income Summary 69000 Coburn, Capital 34840 34160 Webb, Capital Compute the partners' ending capital balances under the assumption in part (c) above. Ending capital Coburn Webb 34840
On October 1, 2021, Pamu and Kevin formed a partnership and agreed to share profits and lossesin the ratio of 3:7, respectively. Balances of capital accounts should be in accordance with the profitand loss percentage on the date of partnership formation. Pamu contributed a parcel of land that costher P200,000. Kevin contributed P300,000 cash. The land has a quoted price of P360,000 on October1, 2021. What amount should be recorded in Pamu’s capital account upon formation of thepartnership assuming the use of bonus method? a. P150,000b. P198,000c. P200,000d. P360,000
After a year of operations, the partnership of Deborah, Emilda and Fe generated income amounting to P 150,000. The capital balance of Deborah is P 50,000 while Emilda and Fe each have a capital balance of P 75,000. The partners share profits based on capital ratio. How much is the share of Deborah in the income of the partnership? A. P 75,000 B. P 56,250 C. P 37,500 D. P 60,000
Partners A and B formed a partnership on January 1, 2020 where Partner A invested P500,000 while Partner B invested P300,000. Profit and loss as agreed upon by partners is to be shared in the ratio of the original capital. The drawing accounts of Partners A and B have debit balances of P24,000 and P12,000 respectively. Net income for the period ending December 31, 2020 amounted to P180,200. What is capital balance of Partner B for the year ending December 31, 2020?
On January 1, 2020 Jinn Inc. issued 10-year, 10% $100,000 bonds for 105. because the market rate of interest on that date was 8%. The bonds pay interest annually on December 31st each year. One year later on January 1, 2021, Jinn Inc. retires the $100,000 bonds by repurchasing them in the market for $106,000. What is the amount of gain or loss on the retirement of the bonds? O $1,000 loss O $500 gain O $1.000 gain O $2,600 loss O $2,600 gain
-X. Y, and Z formed a partnership on Jnauary 1, 2021, and contributed P150,0003; P200,000; P300,000, respectively. Their articles of co-partnership provide that the operating income be shared among partners as follows: as salary, P24,000 for X; P18,000 for Y; and P12,000 for Z; interest of 12% on the average capital during 2021 of the three partners; and the remainder in the ratio of 4:2:4, respectively. The operating income for the year-end December 31, 2021 amounted to P200,000. X contributed additional capital of P30,000 on July 1, and made a drawing of P10,000 on October 1; Y contributed additional capital of P20,000 on August 1, and made a drawing of P10,000 on October 1; and Z made a drawing of P30,000 on November 1, 2021. How much is the shared profit of partner Z? *
Use the following information for numbers 29 and 30. On June 30, 2018, the balance sheet for the partnership of D, E and F, together with their respective profit and loss ratios, is summarized as follows: Assets 300,000 D, Loan 15,000 D, Capital (20%) 70,000 E, Capital (20%) F, Capital (60%) Total Liabilit ies and Capital 65,000 150,000 Total Assets 300,000 300,000 D has decided to retire from the partnership, and by mutual agreement the assets are to be adjusted to their fair values of P260,000 at June 30, 2018. It is agreed that the partnership will pay D, P102,000 cash for his interest exclusive of his loan which is to be repaid in full. After D's retirement, what are the capital balances of each partner? 29. Partner E. 30. Partner F.
On January 1, 2021, Hinata, Tsukki and Kageyama formed Haikyu Partnership with a total agreed capitalization of P1,000,000. The capital interest ratio of the Haikyu Partnership is 5:1:4 while the profit or loss ratio is 6:2:2, respectively for Hinata, Tsukki, and Kageyama. During 2021, Hinata and Tsukki made additional investments of P200,000 and P500,000, respectively. At the end of 2021, Hinata and Kageyama made drawings of P300,000 and P100,000, respectively. On December 31, 2021, the capital balance of Kageyama is reported at P250,000. How much is the total equity at the end of the year?
The account balances for April & May LLP on January 1,2020, were as follows: April, Capital 200,00. May, Capital, 100,000. April and May shared net income and losses in the ratio of 3:2 respectively. The partners agreed to admit July to the partnership with a 35% interest in partnership capital and net income. July invested 100,000 cash and no goodwill was recognized. What is the balance of April’s capital account after the new partnership is created?

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