P 58,850 32,400 2,500 Service Fee Income 19,000 2,575 238,000 5,950 Sales Salaries 432,000 21,600 Store Supplies Expense 15,000 50,000 Utilities Expense 600 Mel, Capital Membership Fee Cash Accounts Receivable Allowance for Bad Debts Notes Receivable Unexpired Insurance Furniture & Fixtures Accumulated Depn. - Furniture Equipment Accumulated Depn. - Equipment Accounts Payable Notes Payable Unearned Commissions Jay, Capital Jay, Personal 40,000 945,900 1,530,500 300,160 108,970 644,000 346,000 150,000 3,400 2,090 310,850 10,610 5,455 15,000 Advertising Expense Taxes and Licenses Rent Office Salaries Office Supplies Expense Interest Expense 60,000 Interest Income 3,600 Loss on Foreign Exchange Partnership agreement calls for the following: Monthly salary allowance of P5,000 for Mel and P7,500 for Jay, 12% interest on capital balances, and residual profit to be shared equally.

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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21 The following list of accounts and their balances appear on the books of MJ Thai Spa as
of December 31, 2018:
P 58,850
32,400 Membership Fee
2,500
19,000
2,575
238,000
5,950
432,000
21,600
15,000
50,000
600
Mel, Capital
Cash
Accounts Receivable
Allowance for Bad Debts
Notes Receivable
Unexpired Insurance
Furniture & Fixtures
Accumulated Depn. - Furniture
Equipment
Accumulated Depn. - Equipment
Accounts Payable
Notes Payable
Unearned Commissions
Jay, Capital
Jay, Personal
40,000
945,900
1,530,500
300,160
108,970
644,000
346,000
150,000
3,400
2,090
310,850
10,610
5,455
15,000
Service Fee Income
Advertising Expense
Taxes and Licenses
Rent
Sales Salaries
Office Salaries
Store Supplies Expense
Office Supplies Expense
Utilities Expense
Interest Expense
Interest Income
Loss on Foreign Exchange
60,000
3,600
Partnership agreement calls for the following:
Monthly salary allowance of P5,000 for Mel and P7,500 for Jay,
12% interest on capital balances, and residual profit to be shared equally.
Additional information were given to adjust the books:
a) Provision for bad debts should be 10% of the outstanding accounts receivable.
b) Office Furniture and Fixtures were acquired July 1, 2017 and the Delivery Equipment
were acquired January 1, 2017. Depreciation rate is the same for both assets.
c) One half of the unearned commission is already earned.
d) Prepaid insurance on the delivery equipment is payable annually starting May 1.
e) P10,000 of the notes receivable is interest bearing at 18% dated December 1, 2018
and due after 60 days.
f) The note payable was issued to the bank and discounted at 18% for a year on
December 1, 2018. The discount was charged to interest expense.
g) Tax rate is 30%.
Direction: Prepare a 10-column worksheet with a profit distribution table.
Transcribed Image Text:21 The following list of accounts and their balances appear on the books of MJ Thai Spa as of December 31, 2018: P 58,850 32,400 Membership Fee 2,500 19,000 2,575 238,000 5,950 432,000 21,600 15,000 50,000 600 Mel, Capital Cash Accounts Receivable Allowance for Bad Debts Notes Receivable Unexpired Insurance Furniture & Fixtures Accumulated Depn. - Furniture Equipment Accumulated Depn. - Equipment Accounts Payable Notes Payable Unearned Commissions Jay, Capital Jay, Personal 40,000 945,900 1,530,500 300,160 108,970 644,000 346,000 150,000 3,400 2,090 310,850 10,610 5,455 15,000 Service Fee Income Advertising Expense Taxes and Licenses Rent Sales Salaries Office Salaries Store Supplies Expense Office Supplies Expense Utilities Expense Interest Expense Interest Income Loss on Foreign Exchange 60,000 3,600 Partnership agreement calls for the following: Monthly salary allowance of P5,000 for Mel and P7,500 for Jay, 12% interest on capital balances, and residual profit to be shared equally. Additional information were given to adjust the books: a) Provision for bad debts should be 10% of the outstanding accounts receivable. b) Office Furniture and Fixtures were acquired July 1, 2017 and the Delivery Equipment were acquired January 1, 2017. Depreciation rate is the same for both assets. c) One half of the unearned commission is already earned. d) Prepaid insurance on the delivery equipment is payable annually starting May 1. e) P10,000 of the notes receivable is interest bearing at 18% dated December 1, 2018 and due after 60 days. f) The note payable was issued to the bank and discounted at 18% for a year on December 1, 2018. The discount was charged to interest expense. g) Tax rate is 30%. Direction: Prepare a 10-column worksheet with a profit distribution table.
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