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FINANCIAL ACCOUNTING
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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The partners Macopa, Sineguelas and Ashitaba have capital balances of P300,000, P450,000 and P200,000 respectively, while profit and loss was divided in the ratio 4:4:2. On December 1, 2017, Macopa announced his intention to leave the partnership at the end of the year. During the year the partnership gained a Net Income of P250,000 which was distributed as follows: 5% interest on their individual capital, salaries of P6,000 to Partners Sineguelas and Ashitaba, 4% Bonus on Net income after salaries and interest on capital was allowed to partner Macopa. Instruction: 1) Compute for the distribution of Net Income at the end of the year. 2) Give the entry to record the withdrawal of Macopaat the end of the year assuming a) Macopa cash settlement was P20,000 less than her capital interest and the bonus method was used. b) Macopa's cash settlement was P10,000 more than her capital interest and the asset revaluation method was used c) Macopa's cash settlement was equal to her capital interest.
Transcribed Image Text:The partners Macopa, Sineguelas and Ashitaba have capital balances of P300,000, P450,000 and P200,000 respectively, while profit and loss was divided in the ratio 4:4:2. On December 1, 2017, Macopa announced his intention to leave the partnership at the end of the year. During the year the partnership gained a Net Income of P250,000 which was distributed as follows: 5% interest on their individual capital, salaries of P6,000 to Partners Sineguelas and Ashitaba, 4% Bonus on Net income after salaries and interest on capital was allowed to partner Macopa. Instruction: 1) Compute for the distribution of Net Income at the end of the year. 2) Give the entry to record the withdrawal of Macopaat the end of the year assuming a) Macopa cash settlement was P20,000 less than her capital interest and the bonus method was used. b) Macopa's cash settlement was P10,000 more than her capital interest and the asset revaluation method was used c) Macopa's cash settlement was equal to her capital interest.
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