I - PROBLEM SOLVING:Eugene and Alfred are partners in their Ghost Fighting business.Alfred is the managing partner. As of December 2020, their capital accountshowed the following:Eugene Capital_45000 300000 1-JanAlfred Capital90000450000 1-Jan1-Jul-Apr1-Dec3000030000 1-Apr1-Dec105000150000 1-Jun105000 1-Nov195000 1-0ct75000 435000195000 795000|CASE I: Assuming the partnership earned a net profit of P360,000.CASE II: Assuming the partnership incurred a net los of P60,000Required: On your answer sheet (yellow pad), using the following agreements,distribute the profit and losses in Case I & II to Eugene & Alfred.Make a journal entry after your computation.1) Equally2:4 ratio to Eugene and Alfred, respectively3)2)4)5)6) Based on average capital balances60%:40% ratio respectivelyBased on beginning capital balancesBased on ending capital balancesUsing Case I only, the partners agreed to divide the net profit by:a) allowing 10% interest on average capitalb) allowing salary to Alfred amounting to P60,000.c) Alfred will receive a 10% bonus on net income.7)d) Balance/remainder to be distributed 60:40 respectively I - PROBLEM SOLVING:Eugene and Alfred are partners in their Ghost Fighting business.Alfred is the managing partner. As of December 2020, their capital accountshowed the following:Eugene CapitalAlfred Capital1-Jul450003000001-Jan1-Apr900004500001-Jan1-Dec30000300001-Apr1-Dec1050001500001-Jun1050001-Nov1950001-0ct75000435000195000795000CASE I: Assuming the partnership earned a net profit of P360,000.CASE II: Assuming the partnership incurred a net loss of P60,000Required: On your answer sheet (yellow pad), using the following agreements,distribute the profit and losses in Case I & II to Eugene & Alfred.Make a journal entry after your computation.1)2)3)Equally2:4 ratio to Eugene and Alfred, respectively60%:40% ratio respectively4)5)6)Based on beginning capital balancesBased on ending capital balancesBased on average capital balancesUsing Case I only, the partners agreed to divide the net profit by:a) allowing 10% interest on average capitalb) allowing salary to Alfred amounting to P60,000.с)7)Alfred will receive a 10% bonus on net income.d)Balance/remainder to be distributed 60:40 respectively

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Answered: I - PROBLEM SOLVING: Eugene and Alfred…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

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I - PROBLEM SOLVING: Eugene and Alfred are partners in their Ghost Fighting business. Alfred is the managing partner. As of December 2020, their capital account showed the following: Eugene Capital_ 45000 300000 1-Jan Alfred Capital 90000450000 1-Jan 1-Jul -Apr 1-Dec 30000 30000 1-Apr 1-Dec 105000 150000 1-Jun 105000 1-Nov 195000 1-0ct 75000 435000 195000 795000| CASE I: Assuming the partnership earned a net profit of P360,000. CASE II: Assuming the partnership incurred a net los of P60,000 Required: On your answer sheet (yellow pad), using the following agreements, distribute the profit and losses in Case I & II to Eugene & Alfred. Make a journal entry after your computation. 1) Equally 2:4 ratio to Eugene and Alfred, respectively 3) 2) 4) 5) 6) Based on average capital balances 60%:40% ratio respectively Based on beginning capital balances Based on ending capital balances Using Case I only, the partners agreed to divide the net profit by: a) allowing 10% interest on average capital b) allowing salary to Alfred amounting to P60,000. c) Alfred will receive a 10% bonus on net income. 7) d) Balance/remainder to be distributed 60:40 respectively

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