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2. The income distribution for the year ended Dec. 31, a

2. The income distribution for the year ended Dec. 31, a

FINANCIAL ACCOUNTING
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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Required: Prepare the journal entries to record the following: Admission by Investment and Division of Profits Problem #16 The condensed statement of financial position of Matuguinas and Sorima on Dec. 31, 2018, follows: Matuguinas and Sorima Statement of Financial Position December 31, 2018 Assets Liabilities and Partners' Capital Current Assets Ptant Assets (net) P100,000 Liabilities Matuguinas, Capital Sorima, Capital P300,000 200,000 100,000 P600,000 500,000 Total P600,000 Total Matuguinas and Sorima shared profits or losses 40% and 60%, respectively. On Jan. 2, 2019, Pateno was admitted to the partnership by investing the net assets of her highly profitable proprietorship. The partners agreed to the following current fair values of the identifiable net assets of Pateno's proprietorship: P 70,000 230,000 P350,000 200,000 P100,000 Current Assets Plant Assets Total Assets Less: Liabilities Net Assets Pateno's capital account was credited for P120,000. The partners agreed further that the current fair values of the net assets of Matuguinas and Sorima were equal to their carrying amounts and that the accounting records of the old partnership should be used for the new partnership. The following partner-remuneration plan was adopted for the new partnership: a. Salaries of P10,000 to Matuguinas, P15,000 to Sorima, and P20,000 to Pateno. 0. A bonus of 10% of income after salaries and bonus to Pateno. C Balance: 309% to Matuguinas, 40% to Sorima, and 30% to Pateno. ror the year ended Dec. 31, 2019, the profit of the partnership is P78,000 before salaries and bonus to Pateno. The admission of Pateno to be partnership on Jan. 2, 2019. *The income distribution for the year ended Dec. 31, 2019.
Transcribed Image Text:Required: Prepare the journal entries to record the following: Admission by Investment and Division of Profits Problem #16 The condensed statement of financial position of Matuguinas and Sorima on Dec. 31, 2018, follows: Matuguinas and Sorima Statement of Financial Position December 31, 2018 Assets Liabilities and Partners' Capital Current Assets Ptant Assets (net) P100,000 Liabilities Matuguinas, Capital Sorima, Capital P300,000 200,000 100,000 P600,000 500,000 Total P600,000 Total Matuguinas and Sorima shared profits or losses 40% and 60%, respectively. On Jan. 2, 2019, Pateno was admitted to the partnership by investing the net assets of her highly profitable proprietorship. The partners agreed to the following current fair values of the identifiable net assets of Pateno's proprietorship: P 70,000 230,000 P350,000 200,000 P100,000 Current Assets Plant Assets Total Assets Less: Liabilities Net Assets Pateno's capital account was credited for P120,000. The partners agreed further that the current fair values of the net assets of Matuguinas and Sorima were equal to their carrying amounts and that the accounting records of the old partnership should be used for the new partnership. The following partner-remuneration plan was adopted for the new partnership: a. Salaries of P10,000 to Matuguinas, P15,000 to Sorima, and P20,000 to Pateno. 0. A bonus of 10% of income after salaries and bonus to Pateno. C Balance: 309% to Matuguinas, 40% to Sorima, and 30% to Pateno. ror the year ended Dec. 31, 2019, the profit of the partnership is P78,000 before salaries and bonus to Pateno. The admission of Pateno to be partnership on Jan. 2, 2019. *The income distribution for the year ended Dec. 31, 2019.
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