EXERCISE 6-7. Journal Entries 4. Partners Doris, Jacob, and Jeff contributed P70,000, P90,000, and industry, respectively, to the partnership and agreed to distribute profits and lossesunder the following situations:1. Equally2. Doris - 30%; Jacob - 50%; and Jeff - 20%Prepare the journal entries to record the distribution of P80,000 loss to Doris, Jacob, and Jeff in each of the above situation, assuming:Case A: Permanent capital balances are maintained.Case B: Permanent capital balances are not maintained. EXERCISE 6-5. Journal Entries 2. Partners Bryan, Danilo, and Nelida contributed P60,000, P100,000, and industry, respectively, to the partnership and agreed to distribute profitsunder the following situations:1. Equally2. Bryan - 25%; Danilo - 40%; and Nelida - 35%Prepare the journal entries to record the distribution of P90,000 profit to Bryan, Danilo, and Nelida in each of the above situation, assuming:Case A: Permanent capital balances are maintained.Case B: Permanent capital balances are not maintained.

When a partner has fixed capital, the quantity of capital the partner has stayed constant during the…

Answered: EXERCISE 6-5. Journal Entries 2.…

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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On December 31, the capital balances and income ratios in Sunland Company are as follows. Partner Capital Balance Income Ratio Trayer $ 64,500 50% Emig 35,000 30% Posada 34,500 20% (1) Each of the continuing partners agrees to pay $ 19,600 in cash from personal funds to purchase Posada’s ownership equity. Each receives 50% of Posada’s equity. (2) Emig agrees to purchase Posada’s ownership interest for $ 24,200 cash. (3) Posada is paid $ 37,700 from partnership assets, which includes a bonus to the retiring partner. (4) Posada is paid $ 25,780 from partnership assets, and bonuses to the remaining partners are recognized. Journalize the withdrawal of Posada under each of the following assumptions. If Emig’s capital balance after Posada’s withdrawal is $ 38,930, what were (1) the total bonus to the remaining partners and (2) the cash paid by the partnership to Posada?
The partnership of Angel Investor Associates began operations on January 1, 20Y5, with contributions from two partners as follows: $73,440 101,520 Ben Testerman The following additional partner transactions took place during the year: 1. In early January, Randy Campbell is admitted to the partnership by contributing $41,040 cash for a 19% interest. Dennis Overton 2. Net income of $280,000 was earned in 20Y5. In addition, Dennis Overton received a salary allowance of $60,000 for the year. The three partners agree to an income-sharing ratio equal to their capital balances after admitting Campbell. 3. The partners' withdrawals are equal to half of the increase in their capital balances from salary allowance and income. Prepare a statement of partnership equity for the year ended December 31, 20Y5. If an amount box does not require an entry, leave it blank. Angel Investor Associates Statement of Partnership Equity For the Year Ended December 31, 20Y5 Ben Testerman, Capital Balances,…
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The partnership agreement of Jones, King, and Lane provides for the annual allocation of the business's profit or loss in the following sequence: • Jones, the managing partner, receives a bonus equal to 15 percent of the business's profit. • Each partner receives 10 percent interest on average capital investment. Any residual profit or loss is divided equally. The average capital investments for 2021 were as follows: Jones King Lane The partnership earned $84,000 net income for 2021. Prepare a schedule showing how the 2021 net income should be allocated to the partners. (Loss amounts should be indicated with a minus sign.) Net income Bonus Interest $ 190,000 380,000 570,000 Remainder to allocate Total allocation Jones King Lane Total
4. A and B formed a partnership. The partnership agreement stipulates the following: • Monthly salaries of P6,000 for A and P2,000 for B. • 20% bonus to A, after deductions for salary, interest, and bonus. 10% interest on the weighted average capital of B. Any remaining amount is shared equally. The partnership's records show the following: Revenues Expenses (including salary, interest, and bonus) Profit 150,000 (120,000) 30,000 n this message ose of the indiw ender and may not v reflect the views f Philippine Cultural College Page | 2 The movements in B's capital account are as follows: В. Сарital 60,000 beg. Aug. 1 withdrawal 30,000| 20,000 Mar. 31 additional investment Oct. 1 additional investment Dec. 31 additional investment 40,000 10,000 100,00 end. How much is the share of B in the partnership profit? a. 93,000 b. 52,250 с. 46,250 d. 45,000
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The partnership contract for the SDF and MGB Partnership, a general partnership, provided for annual salaries of P140,000 and P175,000 to SDF and MGB, respectively, with the resulting profit or loss to be divided equally. • Profit before salaries for the year ended June 30, 2021 was P315,000. Required: Give the journal entry to transfer income summary account balance to drawing accounts of the partners.
Exercise 3 -7 1. Martin and Isidore form a partnership with investments of P 1,000,000 and P 500,000 respectively. Compute their share in the net income of P210,000 for six months of the partnership's operation under the following agreement: a. 10% interest is allowed on partners' original investments. b. Allowance of annual salary of P120,000 to Martin and P144,000 to Isidore. c. Balance 2:1 respectively. 2. With the same information in number 1, assuming the partnership incurred a loss of P72,000 for the year instead of a net income of P210,000 for six months.

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