Kwong and Morales entered into a partnership as at Mar. 1, 2019 by the investing P125,000 and P75,000, respectively. They agreed that Kwong, as the managing partner, was to receive a salary of P30,000 per year and a bonus computed at 10% of the profit after adjustment for the salary; the balance of the profit was to be distributed in the ratio of their original capital balances. On Dec. 31, 2019, normal account balances were as follows: Cash P70,000 Accounts Payable P 60,000 Accounts Receivable 67,000 Kwong, Capital 125,000 Furniture and Fixtures 45,000 Morales, Capital 75,000 Sales Returns 5,000 Kwong, Drawing 20,000 Purchases 196,000 Morales, Drawing 30,000 Operating Expenses 60,000 Sales 233,000 Inventories on Dec. 31, 2019, were as follows: supplies, P2,500, merchandise, P73,000. Prepaid insurances was P950 while accrued expenses were P1,550. Depreciation rate was 20% per year. The partner’s capital balances on Dec. 31, 2019, after closing the profit and drawing accounts, were: Kwong Morales a. P135,940 P47,960 b. P135,540 P49,860 c. P139,680 P48,680 d. P142,350 P47,670
Kwong and Morales entered into a
P75,000, respectively. They agreed that Kwong, as the managing partner, was to receive a salary of
P30,000 per year and a bonus computed at 10% of the profit after adjustment for the salary; the balance
of the profit was to be distributed in the ratio of their original capital balances. On Dec. 31, 2019, normal
account balances were as follows:
Cash P70,000 Accounts Payable P 60,000
Furniture and Fixtures 45,000 Morales, Capital 75,000
Sales Returns 5,000 Kwong, Drawing 20,000
Purchases 196,000 Morales, Drawing 30,000
Operating Expenses 60,000 Sales 233,000
Inventories on Dec. 31, 2019, were as follows: supplies, P2,500, merchandise, P73,000. Prepaid
insurances was P950 while accrued expenses were P1,550.
partner’s capital balances on Dec. 31, 2019, after closing the profit and drawing accounts, were:
Kwong Morales
a. P135,940 P47,960
b. P135,540 P49,860
c. P139,680 P48,680
d. P142,350 P47,670
Trending now
This is a popular solution!
Step by step
Solved in 2 steps with 4 images
