Exercise 3-6 (Division of Profit; Interest on Capital, Salary Allowance, and Bonus toManaging Partner)Becky and Lala formed a partnership on January 2, 2019 and agreed to share profit 90% and10%, respectively. Becky invested cash of P200,000. Lala invested no assets but has aspecialized expertise and manages the firm full time. There were no withdrawals during theyear. The partnership contract provides for the following:1. Capital accounts are to be credited annually with the interest at 10% of beginningcapital.2. Lala is to be paid a salary of P8,000 a month.3. Lala is to receive a bonus of 25% of profit calculated before deduction of salary andinterest on capital accounts.4. Bonus, interest, and Lala's salary are to be considered as expenses.The fiscal year 2014 income statement for the partnership includes the following:P701,600379.600P322.000RevenueExpenses (including salary, interest and bonus)ProfitInstructions: Determine the amount of bonus to be credited to Lala.You may modify your answer sheet to fit your solution.Follow the Instructions strictly. Answer what is asked only.Note:

In the given question, profit has been shown after deducting salary, interest and bonus. For…

Exercise 3-6 (Division of Profit; Interest on Capital, Salary Allowance, and Bonus to Managing Partner) Becky and Lala formed a partnership on January 2, 2019 and agreed to share profit 90% and 10%, respectively. Becky invested cash of P200,000. Lala invested no assets but has a

Exercise 3-6 (Division of Profit; Interest on Capital, Salary Allowance, and Bonus to Managing Partner) Becky and Lala formed a partnership on January 2, 2019 and agreed to share profit 90% and 10%, respectively. Becky invested cash of P200,000. Lala invested no assets but has a

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

Subject- accounting
Dividing Partnership Income Beau Dawson and Willow McDonald formed a partnership, investing $180,000 and $60,000, respectively. Determine their participation in the year's net income of $290,000 under each of the following independent assumptions: a. No agreement concerning division of net income. b. Divided in the ratio of original capital investment. c. Interest at the rate of 6% allowed on original investments and the remainder divided in the ratio of 2:3. d. Salary allowances of $38,000 and $47,000, respectively, and the balance divided equally. e. Allowance of interest at the rate of 6% on original investments, salary allowances of $38,000 and $47,000, respectively, and the remainder divided equally. Dawson a. b. C. d. e. McDonald
Problem 2: Julia and Joshua entered into a partnership on April 1, 2013, investing P 625,000 and P 375,000, respectively. It was agreed that Julia, the managing partner, is to receive a salary of P 162,875 per annum and 10% of net income after adjustment for the salary, the partners failed to come into an agreement on how to allocate the remaining profit. On March 31, 2014, account balances are as follows:
i.2
Instructions The capital accounts of Trent Henry and Tim Chou have balances of $142,900 and $85,800, respectively. LeAnne Gilbert and Becky Clarke are to be admitted to the partnership. Gilbert buys one-fifth of Henry's interest for $31,400 and one-fourth of Chou's interest for $20,200. Clarke contributes $74,500 cash to the partnership, for which she is to receive an ownership equity of $74,500. Required: A. On December 31, journalize the entries to record the admission of (1) Gilbert and (2) Clarke. Refer to the Chart of Accounts for exact wording of account titles. B. What are the capital balances of each partner after the admission of the new partners?
Exercise 3-7. Distribution of Net Loss to partners Carmela and Ferdinand formed a partnership on January respectively. The partnership reported a net loss of P80,000. 1, 2023, with initial investments of P300,000 and P500,000, The partnership agreement provides that profit or loss shall be distributed accordingly: • Monthly salary of P10,000 and P5,000 respectively for Carmela and Ferdinand, . 10% interest on partners' original capital. . 20% bonus to Carmela based on net income before interest, and salary. •The remainder is shared in the ratio of 3:2 respectively. Required: Determine the share of Carmela and Ferdinand in the net loss.
Case 1 Mazin, Mansoor and Malik started a partnership firm on January 1, 2019. They contributed RO. 50,000, RO. 40,000 and RO. 30,000 respectively as their capitals and decided to share profits in the ratio of 3:2:1. The partnership deed provided that Mazin is to be paid salary of RO. 12000 p.a. and Mansoor commission of RO. 2,500 every 6 months. It also provided that interest on capital be allowed @ 6% p.a. The drawings for the year were: Mazin RO. 6,000, Mansoor RO. 4,000 and Malik RO. 2,000. Interest on drawings was RO. 270 for Mazin, RO.180 for Mansoor and RO. 90 for Malik. The net amount of profit as per the profit and loss account for the year ended 2019 was RO. 35,660. Question: Prepare the necessary accounting entries, the profit and loss appropriation account and the partners' capital accounts. Based on the above information answer the following ‘3’ questions. (Do not upload any documents in the moodle) 30. The balance of capital for partner Mansoor at the end of the year…
Exercise 3-2 (Division of Profit; Interest on Average Capital) Danica and Jenson are partners. Their capital accounts during the fiscal year 2019 were as follows: Danica, Capital 120,000 1/1 Jenson, Capital 3/1 180,000 1/n 1,200,000 140,000 100,000 9/1 800,000 160,000 60,000 4/1 7/1 11/1 10/1 Profit of the partnership is P250,000 for the year. Determine the partners shared profit under the following assumptions: 1. Each partner is to be credited 12% interest on his average capital. 2. Any remaining profit or loss is to be divided equally.
Case 1 Mazin, Mansoor and Malik started a partnership firm on January 1, 2019. They contributed RO. 50,000, RO. 40,000 and RO. 30,000 respectively as their capitals and decided to share profits in the ratio of 3:2:1. The partnership deed provided that Mazin is to be paid salary of RO. 12000 p.a. and Mansoor commission of RO. 2,500 every 6 months. It also provided that interest on capital be allowed @ 6% p.a. The drawings for the year were: Mazin RO. 6,000, Mansoor RO. 4,000 and Malik RO. 2,000. Interest on drawings was RO. 270 for Mazin, RO.180 for Mansoor and RO. 90 for Malik. The net amount of profit as per the profit and loss account for the year ended 2019 was RO. 35,660. Question: Prepare the necessary accounting entries, the profit and loss appropriation account and the partners' capital accounts. Based on the above information answer the following ‘3’ questions. (Do not upload any documents in the moodle) 31. Identify which one of the following accounting entry for payment…
Partnership A, B and C is a law firm. You have been engaged as accountant to prepare financial statements for the year ended Dec. 31, 2019 Partnerships profits are alllocated based fist on salaries,then on interest on opening capital balances then on fixed ratio. Salary allocation amount are A $100000 B $100000 C $160000 Opening capital balances A $70000 B $60000 C $70000 Interest rate is: 5% Fixed ratio is A 3 B 2 C 5 required Prepare year end adjusting entries Allocate partnership profit or loss to each partner Prepare adjusting entry and complete trial balnce Prepare income statement and statement of partners capital for the year ended Dec. 31, 2019 and a balance sheet for Dec.31
How much is the share of Lorna share in the net income? * P89,235.00 P90,382.50 P90,735.00 P91,350.00 answer not given
SCO PROFESSOR: NAME: SECTION: Problem #20 Withdrawal of a Partner position for the partnership on that date follows: Cebedo, Basa and Ibrahim Statement of Financial Position July 10, 2019 Liabilities and Partners' Capital 骨 Assets P 74,000 36,000 135,000 30,000 P275,000 Liabilities P 45,000 120,000 Cash Trade Accounts Receivable (net) Plant Assets (net) Goodwill (net) Cebedo, Capital Basa, Capital Ibrahim, Capital 60,000 50,000 P275,000 Total Total Required: Prepare the journal entries to record Ibrahim's withdrawal under each of the following assumptions: 1. Ibrahim is paid P54,000, and the excess amount paid over Ibrahim's capital account balance is recorded as a bonus to Ibrahim from Cebedo and Basa. 2. Ibrahim is paid P45,000, and the difference is recorded as a bonus to Cebedo and Basa from Ibrahim. * 1oranim accepted cash of P40,500 and plant assets (equipment) with a current fair value of P9,000. The equipment had cost P30.000 and was 60% depreciated, with sidual value (Record…