Alvin and Aldrin are partners sharing profits 60% and 40% respectively. The average profits for the past two years are to be capitalized at 20% per year (for purposes of admitting a new partner) in determining the aggregate capital of Alvin and Aldrin, after adjusting the profits for the following items omitted from the books: 20x9 Omissions at year-end Prepaid expense Accrued expense Deferred income 20x8 P3, 200 P2,400 P2,800 Accrued income P2,000 Other pertinent information are as follows: 20x8 20x9 Net income of partnership Capital accounts, end of the P28,800 P27,200 year 90,800 108,000 Alvin Aldrin 90,000 110,000 The aggregate capital of Alvin and Aldrin after capitalizing the average profits at 20% per annum is:

Alvin and Aldrin are partners sharing profits 60% and 40% respectively. The average profits for the past two years are to be capitalized at 20% per year (for purposes of admitting a new partner) in determining the aggregate capital of Alvin and Aldrin, after adjusting the profits for the following items omitted from the books: 20x9 Omissions at year-end Prepaid expense Accrued expense Deferred income 20x8 P3, 200 P2,400 P2,800 Accrued income P2,000 Other pertinent information are as follows: 20x8 20x9 Net income of partnership Capital accounts, end of the P28,800 P27,200 year 90,800 108,000 Alvin Aldrin 90,000 110,000 The aggregate capital of Alvin and Aldrin after capitalizing the average profits at 20% per annum is:

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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