Assuming that an interest of 20% per annum is given on average capital and10. On January 1, 2020, Lim and Pan decided to form a partnership. At the endof the year, the partnership made a net income of P630,000. The capitalaccounts of the partnership show the following transactions.Lim, CapitalPan, CapitalDebitCreditDebitCreditJanuary 1April 1210,000131,25026,250June 152,500August 1September 152,50015,75026,25021,000October 15,250December 126,250the balance of the profits is allocated equally, the allocation of profitsshould be:a. Lim, P315,000; Pan, P311,850b. Lim, P321,300; Pan, P308,700c. Lim, P352,800; Pan, P277,200d. Lim, P361,200; Pan, P268,800

Here in this question, we are required to find out how much net income is attributable to each of…

Answered: On January 1, 2020, Lim and Pan decided…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

X and Y were partners in a firm with a profit sharing ratio of 7:5. During the year ended 31.12.2012 Y makes the drawings as under: Date Amount ($) 01.02.2012 14,000 01.05.2012 10,000 30.06.2012 5,000 31.10.2012 12,000 31.12.2012 4,000 Partnership deed provides that partners are to be charged interest on drawings @ 10% per annum. Calculate the interest chargeable to Y by using Simple Interest Method and Product Method.
15. Rosemarie and Rose are partners sharing profits and losses in the ratio of 7:3 respectively. On February 14, 2020, their respective capital balances are as follows: Rosemarie: P 35, 000; Rose: P 30, 000. On that day, they agreed to admit Rosauro as partner with one third interest in the capital and profits and losses upon investment of P 25, 000. The new partnership will begin with a total capital of P 90, 000. Immediately after the admission of Rosauro, the capital balances of Rosemarie, Rose and Rosauro respectively must be: a. P 30, 000; P 30, 000; P 30, 000 b. P 31, 667; P 28, 333; P30, 000 c. P 31, 500; P 28, 500; P 30, 000 d. P 35, 000; P 25, 000; P 30, 000 e. answer not given
Juan and Pedro’s partnership agreement shows that they will receive a salary of P150,000 and P100,000, respectively. Should there be a remainder, such will be divided based on their average capital balances. Below shows information in their respective capital balances:Juan, capital ending balance – P 3,000,000Debits: June 1 - P 500,000Credits: March 30 – P 1,000,000Credits: October 30 – P 500,000 Pedro, capital ending capital balance – P 4,500,000Credits: May 1 – P 1,000,000Credits: August 31 – P 1,000,000Income for the year amounted to P 300,000. How much profit will be distributed to Juan?
What amount must be invested by GREEN?
A and B formed a Partnership on January 1, 2020. A contributed capital of P50,000, while B contributed capital of P30,000. The Partnership agreement provides for the following: o Capital accounts are to be credited annually with interest at 5% of the beginning capital. o Partner B is to be paid salary of P2,000 a month. o Partner B is to receive a bonus of 10% based on the net income. The Partnership's income statement for the year ended is as follows: Revenues P101,000 30,000 71,000 Expenses (including salary, interest, and bonus) Net income Determine the amount of bonus.
On October 1, 2021, Pamu and Kevin formed a partnership and agreed to share profits and lossesin the ratio of 3:7, respectively. Balances of capital accounts should be in accordance with the profitand loss percentage on the date of partnership formation. Pamu contributed a parcel of land that costher P200,000. Kevin contributed P300,000 cash. The land has a quoted price of P360,000 on October1, 2021. What amount should be recorded in Pamu’s capital account upon formation of thepartnership assuming the use of bonus method? a. P150,000b. P198,000c. P200,000d. P360,000
Kind and Lucky formed a partnership by contributing cash amounting to P240,000 and P480,000 respectively on January 1, 2021. They agreed to share profits and losses in the ratio of 3:2. During the first year of operation, both Kind and Lucky made a withdrawal of P50,000 and P80,000 respectively. They also reported a net profit of P175,000. At the start of the following year, they agreed to admit Mature into the partnership by purchasing one-fourth interest from the partners for P300,000. How much is the capital balance of Kind after admission?
4. On January 1, 2020, Anne, and Betty decided to form a partnership. The firm is to take over the assets and assume liabilities and capital are to be based on net assets transferred after the following adjustments: a. Anne and Betty's inventory is to be valued at P 31,000 and P 22,000, respectively. b. Accounts receivable of P 2,000 in Anne's books and P 1,000 in Betty's books are uncollectible. C. Accrued salaries of P 4,000 to Anne and P 5,000 to Betty are still to be recognized in the books. d. Unused office supplies of Anne amounted to P 5,000 while that of Betty amounted to P 1,500. Unrecorded patent of P 7,000 and prepaid rent of P 4,500 are to be recognized in the books of Anne and Betty, respectively. Anne is to invest or withdraw cash necessary to have a 40% interest in the firm. e. f. Balance sheets for Anne and Betty on January 1, 2020, before adjustments are given below: Betty Anne 50,000 20,000 24,000 5,000 24,000 (3,000) P 120,000 31,000 26,000 32,000 P Cash Accounts…
The account balances for April & May LLP on January 1,2020, were as follows: April, Capital 200,00. May, Capital, 100,000. April and May shared net income and losses in the ratio of 3:2 respectively. The partners agreed to admit July to the partnership with a 35% interest in partnership capital and net income. July invested 100,000 cash and no goodwill was recognized. What is the balance of April’s capital account after the new partnership is created?
Use the following information for numbers 13 to 18. The capital accounts of Sonia and Olga partnership on January 1, 2018 were: Partners Capitals P&L Ratio Sonia 112,000 75% Olga 48,000 25% On October 1, 2018, Thess was admitted for a 40% interest in the partnership when she purchased 40% of each existing partner's capital for P80,000, paid directly to Sonia and Olga. The partnership's net income for the year is P66,000 and 2/3 of it was earned in the last quarter of the year. What are the balances of all partners after Thess's admission to the partnership? 13. Sonia. 14. Olga. 15. Thess. 16. How much will Sonia receive from the above transaction? 17. Assume that Thess is admitted by investing P80,000 into the partnership for a 40% interest, how much is the ending capital balance of Olga after the admission? 18. Assume that Thess is admitted by investing P80,000 into the partnership for a 40% interest, how much is the bonus (given)/received to/from Thess after the admission?
The statement of financial position May Partnership on December 31, 2020 is given below: Cash P45,000 Accounts payable P70,000 Receivable 25,000 Loan payable to Mateo 30,000 Inventories 180,000 Mateo, capital 75,000 Plant and equipment 120,000 Vicente, capital 75,000 Ibe, capital 120,000 Total P370,000 Total P370,000 A new partner, Francisco, was admitted on January 1, 2021, who purchased Mareo’s capital by giving his car costing P250,000 but with a book value of P125,000 and a market value of P100,000, How much was Francisco, capital credited? Answer without peso signs but with commas.
On February 1, 2022, AA and BB formed a partnership and agreed to share profits in the ratio of 4:6, respectively. AA contributed a laptop which cost him P68,000 and was estimated to have a value of P50,000 on date of formation. BB contributed cash of P250,000. How much is the capital account of BB upon formation of the partnership?

SEE MORE QUESTIONS

Recommended textbooks for you

FINANCIAL ACCOUNTING

Accounting

ISBN:

9781259964947

Author:

Libby

Publisher:

MCG

Accounting

ISBN:

9781337272094

Author:

WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.

Publisher:

Cengage Learning,

Accounting Information Systems

Accounting

ISBN:

9781337619202

Author:

Hall, James A.

Publisher:

Cengage Learning,

FINANCIAL ACCOUNTING

Accounting

ISBN:

9781259964947

Author:

Libby

Publisher:

MCG

Accounting

ISBN:

9781337272094

Author:

WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.

Publisher:

Cengage Learning,

Accounting Information Systems

Accounting

ISBN:

9781337619202

Author:

Hall, James A.

Publisher:

Cengage Learning,

Horngren's Cost Accounting: A Managerial Emphasis…

Accounting

ISBN:

9780134475585

Author:

Srikant M. Datar, Madhav V. Rajan

Publisher:

PEARSON

Intermediate Accounting

Accounting

ISBN:

9781259722660

Author:

J. David Spiceland, Mark W. Nelson, Wayne M Thomas

Publisher:

McGraw-Hill Education

Financial and Managerial Accounting

Accounting

ISBN:

9781259726705

Author:

John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles

Publisher:

McGraw-Hill Education

SEE MORE TEXTBOOKS