7. Kwong and Morales entered into a partnership as at Mar. 1, 2019 by the investingP125,000 and P75,000, respectively. They agreed that Kwong, as the managingpartner, 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 bedistributed in the ratio of their original capital balances. On Dec. 31, 2019, normalaccount balances were as follows:CashP70,000Accounts PayableP 60,000125,000Kwong, CapitalMorales, CapitalKwong, DrawingMorales, DrawingAccounts Receivable67,000Furniture & Fixtures45,00075,000Sales Returns5,00020,000Purchases196,00030,000Operating Expenses60,000Sales233,000Inventories on Dec. 31, 2019 were as follows: supplies, P2,500, merchandise,P73,000. Prepaid insurance was P950 while accrued expenses were P1,550.Depreciation rate was 20% per year. The partners' capital balances on Dec. 31,2019, after closing the profit and drawing accounts, were:

In a partnership, two or more parties agree to operate and manage a business and share the profits…

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: P 60,000 125,000 Cash P70,000 Accounts Payable Kwong, Capital Morales, Capital Kwong, Drawing Morales, Drawing Accounts Receivable 67,000 Furniture & Fixtures 45,000 75,000 Sales Returns 5,000 20,000 Purchases 196,000 30,000 Operating Expenses 60,000 Sales 233,000 Inventories on Dec. 31, 2019 were as follows: supplies, P2,500, merchandise, P73,000. Prepaid insurance was P950 while accrued expenses were P1,550. Depreciation rate was 20% per year. The partners' capital balances on Dec. 31, 2019, after closing the profit and drawing accounts, were:

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: P 60,000 125,000 Cash P70,000 Accounts Payable Kwong, Capital Morales, Capital Kwong, Drawing Morales, Drawing Accounts Receivable 67,000 Furniture & Fixtures 45,000 75,000 Sales Returns 5,000 20,000 Purchases 196,000 30,000 Operating Expenses 60,000 Sales 233,000 Inventories on Dec. 31, 2019 were as follows: supplies, P2,500, merchandise, P73,000. Prepaid insurance was P950 while accrued expenses were P1,550. Depreciation rate was 20% per year. The partners' capital balances on Dec. 31, 2019, after closing the profit and drawing accounts, were:

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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Question

7. 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
125,000
Kwong, Capital
Morales, Capital
Kwong, Drawing
Morales, Drawing
Accounts Receivable
67,000
Furniture & Fixtures
45,000
75,000
Sales Returns
5,000
20,000
Purchases
196,000
30,000
Operating Expenses
60,000
Sales
233,000
Inventories on Dec. 31, 2019 were as follows: supplies, P2,500, merchandise,
P73,000. Prepaid insurance was P950 while accrued expenses were P1,550.
Depreciation rate was 20% per year. The partners' capital balances on Dec. 31,
2019, after closing the profit and drawing accounts, were:

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