EXERCISE 2.1Make the TABLE to show the division of net income/net loss and give the CLOSINGENTRIES to close the Income Summary account for the following problems. ShowCOMPUTATIONS:Net income at the end of the year is P100,000. Partners, A, B, C and D,share profits and losses in the ratio of average capital. Interest will beallowed at 5% of average capital for the year which is P10,000, P20,000,P30,000, P40,000, respectively. Salary of P3,000 per month will be allowedfor A, the managing partner. Bonus shall be provided at 25% of net incomebut shall not exceed P20,000 and will be divided based on the ratio of 10%,20%, 25%, 45%.1.2.The net loss for the year is P8,000. Partners, A and Z, share profits andlosses in the ratio of 60%, 40%. Annual salary will be given to Z for P14,000and partners are provided 20% bonus on net income to be divided equally.Income for the year is P12,000. The division of income/loss is based on theratio of 3:2:1. Bonus will be given to partners for P3,000 each. The partnersare X, Y and Z.3.4.Net profit of the previous accounting period is P500,000. The four partners,A, B, Y and Z, share the remaining profit or loss in the ratio of their averagecapital after complying with the following provisions:average capital for each capitalist partners, A, B and Z, a monthly salaryallowance of P10,000 for the managing partner, Y, and a bonus of 40% ofthe net income shall be distributed to the partners equally. The averagecapital of the partners is P50,000, P100,000, P25,000 and P75,000,respectively. Bonus is based on: A) NIBB B) NIAB20% interest onLosses from operations of last year amounted to P50,000. Total interestallowance of P20,000 shall be shared by the partners, Jam and Jim, in theratio of 40%, 60%. Salary allowance shall be also provided to each partner:annual salary for Jam of P60,000 and 3/4 of Jam's salary will be given to Jimyearly. Bonus shall be 50% of net income. The average capital of thepartners is P20,000 and P30,000, respectively.5.

A partnership firm refers to where the partners do business and share the profit and losses that are…

EXERCISE 2.1 Make the TABLE to show the division of net income/net loss and give the CLOSING ENTRIES to close the Income Summary account for the following problems. Show COMPUTATIONS: Net income at the end of the year is P100,000. Partners, A, B, C and D, share profits and losses in the ratio of average capital. Interest will be allowed at 5% of average capital for the year which is P10,000, P20,000, P30,000, P40,000, respectively. Salary of P3,000 per month will be allowed for A, the managing partner. Bonus shall be provided at 25% of net income but shall not exceed P20,000 and will be divided based on the ratio of 10%, 20%, 25%, 45%. 1. The net loss for the year is P8,000. Partners, A and Z, share profits and losses in the ratio of 60%, 40%. Annual salary will be given to Z for P14,000 and partners are provided 20% bonus on net income to be divided equally. 2. Income for the year is P12,000. The division of income/loss is based on the ratio of 3:2:1. Bonus will be given to partners for P3,000 each. The partners are X, Y and Z. 3.

EXERCISE 2.1 Make the TABLE to show the division of net income/net loss and give the CLOSING ENTRIES to close the Income Summary account for the following problems. Show COMPUTATIONS: Net income at the end of the year is P100,000. Partners, A, B, C and D, share profits and losses in the ratio of average capital. Interest will be allowed at 5% of average capital for the year which is P10,000, P20,000, P30,000, P40,000, respectively. Salary of P3,000 per month will be allowed for A, the managing partner. Bonus shall be provided at 25% of net income but shall not exceed P20,000 and will be divided based on the ratio of 10%, 20%, 25%, 45%. 1. The net loss for the year is P8,000. Partners, A and Z, share profits and losses in the ratio of 60%, 40%. Annual salary will be given to Z for P14,000 and partners are provided 20% bonus on net income to be divided equally. 2. Income for the year is P12,000. The division of income/loss is based on the ratio of 3:2:1. Bonus will be given to partners for P3,000 each. The partners are X, Y and Z. 3.

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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