Problem 1 Rajon and Rondo are partners with the following capital transactions during 2018: Rajon Rondo Balance Jan 1 P135,000 cr P140,000 cr February 28 P40,000 dr. March 31 P60,000 cr April 30 P80,000 cr June 30 P50,000 dr. August 31 September 30 P70,000 cr P20,000 cr October 31 P20,000 dr The income summary account has a credit balance of P510,000 Required: Prepare a statement of profit distribution for each of the following independent profit-sharing agreements: a. In the average capital ratio b. Interest on average capital at 9%, salaries of 60,000 and P100,000 to Rajon and Rondo, respectively, a bonus Rajon of 25% of Net income after interest, salaries and bonus, and the balance equally. c. Interest at 10% on the amount by which the ending capital balance exceeds the beginning balance and the balance equally. d. Salaries of P80,000 and P120,000 to Rajon and Rondo, respectively, a bonus to Rajon of 25% of net income a salaries but before bonus, and the balance equally.
Problem 1 Rajon and Rondo are partners with the following capital transactions during 2018: Rajon Rondo Balance Jan 1 P135,000 cr P140,000 cr February 28 P40,000 dr. March 31 P60,000 cr April 30 P80,000 cr June 30 P50,000 dr. August 31 September 30 P70,000 cr P20,000 cr October 31 P20,000 dr The income summary account has a credit balance of P510,000 Required: Prepare a statement of profit distribution for each of the following independent profit-sharing agreements: a. In the average capital ratio b. Interest on average capital at 9%, salaries of 60,000 and P100,000 to Rajon and Rondo, respectively, a bonus Rajon of 25% of Net income after interest, salaries and bonus, and the balance equally. c. Interest at 10% on the amount by which the ending capital balance exceeds the beginning balance and the balance equally. d. Salaries of P80,000 and P120,000 to Rajon and Rondo, respectively, a bonus to Rajon of 25% of net income a salaries but before bonus, and the balance equally.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Concept explainers
Partnership Accounting
A partnership is a kind of arrangement between two or more people whereby they agree to manage the business operations and share its profits and losses in an agreed ratio between them. The agreement that is drafted and signed by the partners of the firm is termed as partnership deed and contains various important clauses agreed between the partners such as profit/loss sharing, interest on capital, remuneration allocation of each partner, drawings, admission of a new partner, etc.
Partner Admission and Withdrawal
A partnership is a kind of arrangement between two or more people whereby they agree to manage the business operations and share its profits and losses in an agreed ratio between them. The agreement that is drafted and signed by the partners of the firm is termed as a partnership deed and contains various important clauses agreed between the partners such as profit/loss sharing, interest on capital, remuneration allocation of each partner, drawings of a partner, etc.
Question
Transcribed Image Text:Problem 1
Rajon and Rondo are partners with the following capital transactions during 2018:
Rondo
Rajon
P135,000 cr
Balance Jan 1
P140,000 cr
February 28
P40,000 dr
March 31
P60,000 cr
April 30
P80,000 cr
P50,000 dr.
P70,000 cr
June 30
August 31
September 30
P20,000 cr
October 31
P20,000 dr
The income summary account has a credit balance of P510,000
Required:
Prepare a statement of profit distribution for each of the following independent profit-sharing agreements:
a. In the average capital ratio
b. Interest on average capital at 9%, salaries of 60,000 and P100,000 to Rajon and Rondo, respectively, a bonus to
Rajon of 25% of Net income after interest, salaries and bonus, and the balance equally.
c. Interest at 10% on the amount by which the ending capital balance exceeds the beginning balance and the
balance equally.
d. Salaries of P80,000 and P120,000 to Rajon and Rondo, respectively, a bonus to Rajon of 25% of net income after
salaries but before bonus, and the balance equally.
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