3. Toys for All Company was set up on July 1,2018 with Barbie investing properties costing P320,000 but with a current fair value of P450,000. Hannah invested twice Barbie's contribution. Partners have no agreement on the division of profits and losses. The business incurred a net loss of P210,000 in 2018 but recovered to earn a net profit of P720,000 in 2019. It was further agreed that annual salaries be withdrawn by each as follows: Barbie, P80,000 and Hannah, P120,000. Directions: a) Distribute the 2018 loss and give the journal entry. Barbie Hannah Total Loss P210,000.00 For distribution 69,300.00 140,700.00 210,000.00 Total Distribution 69,300.00 140,700.00 Formula: Capital Contribution Percentage Share P450,000.00 P900,000.00 P1,350,000.00 33% 67% 100% b) Distribute the 2019 profit and give the journal entry. c) Prepare a statement of partners' equity each year.

3. Toys for All Company was set up on July 1,2018 with Barbie investing properties costing P320,000 but with a current fair value of P450,000. Hannah invested twice Barbie's contribution. Partners have no agreement on the division of profits and losses. The business incurred a net loss of P210,000 in 2018 but recovered to earn a net profit of P720,000 in 2019. It was further agreed that annual salaries be withdrawn by each as follows: Barbie, P80,000 and Hannah, P120,000. Directions: a) Distribute the 2018 loss and give the journal entry. Barbie Hannah Total Loss P210,000.00 For distribution 69,300.00 140,700.00 210,000.00 Total Distribution 69,300.00 140,700.00 Formula: Capital Contribution Percentage Share P450,000.00 P900,000.00 P1,350,000.00 33% 67% 100% b) Distribute the 2019 profit and give the journal entry. c) Prepare a statement of partners' equity each year.

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

Tri Fecta, a partnership, had revenues of $377,000 in its first year of operations. The partnership has not collected on $46,200 of its sales and still owes $39,000 on $170,000 of merchandise it purchased. There was no inventory on hand at the end of the year. The partnership paid $29,000 in salaries. The partners invested $43,000 in the business and $27,000 was borrowed on a five-year note. The partnership paid $2,970 in interest that was the amount owed for the year and paid $9,300 for a two-year insurance policy on the first day of business. Compute net income for the first year for Tri Fecta.
On January 1, 2019, CJ, Maris, and Cecil formed a partnership. CJ put in USD60,000, Maris put in USD60,000, and Cecil put in USD40,000. CJ will be the store manager and will work 40 hours per week in the store. Maris will work 20 hours per week at the store, while Cecil will not. During 2019, each partner withdrew 40% of his or their income distribution. If there was no income distribution to a partner, there were no cash withdrawals. The partnership agreement provides for (a) a salary of USD40,000 to CJ and USD20,000 to Maris, (b) interest on beginning capital balances at a rate of 10%, and (c) any remaining income or loss is to be shared by CJ 40%, Maris 35%, and Cecil 25%. Compute and determine Maris's ending capital balance. Show complete solution and explanation.
the early part of 2021, the partners of HughJacobs, and Thomas sought assistance from a local accountant. They had begun a new business in 2020 but had never used an accountant's services Hugh and Jacobs began the partnership by contributing $150,000 and $100,000 in cash, respectivelyHugh was to work occasionally at the business, and Jacobs was to be employed full-time. They decided that year-end profits and losses should be assigned as follows: Each partner was to be allocated 10 percent interest computed on the beginning capital balances for the period A compensation allowance of $5,000 was to go to Hugh with a $25,000 amount assigned to Jacobs Any remaining income would be split on a 4:6 basis to Hugh and Jacobs, respectively 2020, revenues totaled $175,000, and expenses were $146,000 (not including the partnerscompensation allowance)Hugh withdrew cash of $9,000 during the year, and Jacobs took out $14,000. In addition, the business paid $7,500 for repairs made to Hugh's home and…
Mercedes, Melinda and Julieta are partners sharing profit and loss 40%, 30% and 30% respectively. Capital balances of the partners before the retirement of Mercedes were at P450,000, P425,000 and P400,000. The company sustained a net loss of P45,000 during the year. The partners were allowed to withdraw P10,000 each Instruction. Give the entry to record the retirement of Mercedes, assuming no Bonus or Revaluation will be recorded
15. Kuya Kim Atienza, a partner in the KAPA partnership, has a 30% participation in the partnership profits and losses. Kim Atienza’s capital account has a net decrease of P45,000 during the calendar year 2020. During 2020, Kim Atienza withdraws P100,000 (charged against his capital account) and contributed property valued at P25,000 to the partnership. What was the net profit of the KAPA partnership for the year 2020? 16. On March 1. 2021, Rafael M. Lopez formed a partnership with Conrado T. Valix and made the contributions:Cash …………………………………P 350,000Equipment…………………………. 100,000At the end of the year, Lopez received a share of P54,000 on the P120,000 profits. What should be the share of Valix on the partnership profits? Kindly show your solution on each problem. Thank you.
RAMI has owned and operated a proprietorship for several years. On January 1, 2018, he decides to terminate this business and become a partner in the firm of ASMA and RAMI. ✓ RAMI's investment in the partnership consists of HK$ 140,000 in CASH, and the following assets of the proprietorship: ✔ ACCOUNTS RECEIVABLE HK$130,000 less allowance for doubtful accounts of HK$20,000, ✓ and EQUIPMENT HK$200,000 less accumulated depreciation of HK$45,000. It is agreed that the allowance for doubtful accounts should be HK$28, 000 for the partnership. The fair value of the equipment is HK$175, 500. ASMA brings with her $200,000 Book value in CASH, $ 280,000 Fair value. on Dec. 31, 2018, the net income was $100,000 and the income ratios are RAMI 70%, ASMA 30%. Prepare the journal entry to record the division of the net income. Instructions Journalize RAMI's admission to the firm of ASMA and RAMI.
On May 1, 2022, Carlo and Jamie formed a partnership by contributing P500,000 each. In addition to Carlo's cash contribution, he invested furniture and fixtures costing P150,000 but with an agreed value of P80,000. Moreover, Jamie invested land with a fair value of P1,200,000 but with professional appraiser's value of P1,110,000 subject to unpaid mortgage of P250,000. Profit or loss is to be shared equally between the partners. How much will be the total capitalization of the partnership after the investment of Carlo and Jamie?
If C retired and received ₱90,000 as a retirement price, how much will be the adjusted capital of A under bonus method?
On January 1,2020, Carlo and Jamie formed a partnership with investments of P160,000 and P240,000 respectively. The partnership operations resulted to a net loss amounting to P80,000 at the end of year 2020. But the business was able to generate for the year 2021, its second year of business operation, a net profit after tax of P120,000. Profits and losses are to be shared equally. How much is the capital balance of Carlo as of December 31, 2021 as reflected in the statement of changes in partners' equity?
Tri Fecta, a partnership, had revenues of $363,000 in its first year of operations. The partnership has not collected on $46,800 of its sales and still owes $39,200 on $205,000 of merchandise it purchased. There was no inventory on hand at the end of the year. The partnership paid $29,000 in salaries. The partners invested $44,000 in the business and $25,000 was borrowed on a five-year note. The partnership paid $2,250 in interest that was the amount owed for the year and paid $9,000 for a two-year insurance policy on the first day of business. Ignore income taxes. Compute the cash balance at the end of the first year for Tri Fecta. Multiple Choice $179,150 $191,250 $183,650 $186,750