PROBLEM 6 On March 24, 2020, Pluto and Mars decided to form a partnership Pluto invested P115,000 cash Mars, on the other hand, contributes P110,000 cash and equipment with a book value of P65,000 and a fair value of P70,000 The partnership agreement provided the terms on distribution of income which inclrded the pravisions such as interest allowances for Pluto amounting to P20,000 and for Mars P35,000 Also, partners will receive salary allowances such that Pluto will receive P15,000 and Mars will receive P12,000 The remainder is shared based on fixed ratio of 45% for Pluto and 55% for Mars. The net income reported for the year 2020 is P80,000. Requirements a) Prepare the entry to record each partner's contribution/investment. Indicate the division of net income to each partner có Prepare the entry to distribute the net income

PROBLEM 6 On March 24, 2020, Pluto and Mars decided to form a partnership Pluto invested P115,000 cash Mars, on the other hand, contributes P110,000 cash and equipment with a book value of P65,000 and a fair value of P70,000 The partnership agreement provided the terms on distribution of income which inclrded the pravisions such as interest allowances for Pluto amounting to P20,000 and for Mars P35,000 Also, partners will receive salary allowances such that Pluto will receive P15,000 and Mars will receive P12,000 The remainder is shared based on fixed ratio of 45% for Pluto and 55% for Mars. The net income reported for the year 2020 is P80,000. Requirements a) Prepare the entry to record each partner's contribution/investment. Indicate the division of net income to each partner có Prepare the entry to distribute the net income

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 6 For the year 2021, the partnership of AMMAR and BANU realized a net profit of P240,000. The capital accounts of the partners show the following postings: Jan. 1 May 1 July 1 Aug. 1 Oct. 1 AMMAR Debit Credit Debit Credit 20,000 10,000 120,000 BANU 10,000 10,000 5,000 80,000 20,000
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ACTIVITY • On March 1, 2021, A and B formed partnership with each contributing the following assets: The building is subject to mortgage loan of P800,000 which is to be assumed by the partnership agreement provides that A and B share profits and losses 30% and 70%, respectively. On March 1, 2021 the balance of A and B capital account should be: A в Cash 300.000 700.000 Machinery and equipment 250,000 Building Furniture and fixture 750,000 2.250.000 100,000
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Direction: Answer the following questions in problem 3: [6,7,8]
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PROBLEM 6 – 3: RECONSTRUCTION OF INFORMATION A and B's partnership agreement stipulates the following: Annual salary of P20,000 to A 10% bonus to A, based on profit after salaries and bonus The balances are shared on 60:40 ratio. Requirement: If B's share in the pai tnership profit for the year is P32,000, how much is the partnership profit before salary and bonus? A В Total Amount being allocated 7 Allocation: 1. Salaries 20,000 20,000 2. Bonus 4 3. Allocation of remaining profit As allocated 32,000 32,000 5 3 6
PROBLEM 12. X, Y and Z are partners with average capital balances during 2020 of P120,000, P60,000 and P40,000 respectively. Partners receive 10% interest on their average capital balances. After deducting salaries of P30,000 to X and P20,000 to Y, the residual profit or loss is divided equally. In 2020, the partnership sustained a net loss of P33,000 before interest and salaries to partners. 24) By what amount should X’s capital account change?
Problem 7 On March 1, 2018, X and Y formed a partnership. The partners contributed the following X Y Cash Accounts Receivable P500,000 P400,000 300,000 200,000 50,000 Allowance for doubtful accounts Inventory 20,000 150,000 100,000 Equipment 500,000 200,000 Accumulated depreciation Accounts Payable 25,000 100,000 50,000 400,000 Note Payable 200,000 The partners agree on the following a P10,000 of the accounts receivable of X is to be written-off b. An allowance for doubtful accounts of 15% is to be established on the remaining receivables of X and Y. e. The inventory of Y is to be valued at P140,000 Q04 d. The equipment of Xas under depreciated by P20,000 and the equipment of Y has a fair value of P190,000 e. The note of Xis dated December 1, 2017 and is subject to a 12% interest Interest had not yet been accrued f. The partners agree on a 2:1 profit and loss ratio The partners agree to bring their capital balance proportionate to their profit and loss ratio What is the total assets of…
19 AA and BB are partners with capital accounts that had the following transactions during 2022: AA BB Debit Credit Debit Credit Beginning balance, January 1 P270,000 P280,000 February 28 P80,000 March 1 120,000 April 30 160,000 June 1 P100,000 August 1 140,000 September 30 40,000 October 31 40,000 The partnership agreement provides for the following: Interest of 9% is to be provided to AA Salaries of P4,000 is to be given to BB per quarter A bonus of 25% is to be given to AA based on net income after interest and salaries Remaining balance is to be allocated on a ratio of 40:60. The income summary account has a credit balance of P1,050,000 before profit distribution. BB has a Drawing account amounting to P40,000 which is a withdrawal made by BB in anticipation of future profits on July 1, 2022. How much is the…
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Problem 5 As of July 1, 2020, MM and AA decided to form a partnership. Their balance sheets on this date are: MM AA 15,000.00 680,000.00 (140,000.00) Cash 38,000.00 255,000.00 (30,000.00) 202,000.00 270,000.00 735,000.00 Accounts receivable Allowance for doubtful accounts Merchandise Inventory Machinery and Equipment Total 150,000.00 705,000.00 Accounts payable MМ, Сaptal AA, Capital Total 135,000.00 570,000.00 240,000.00 495,000.00 735,000.00 705,000.00 The partners agreed that the machinery and equipment of MM is under depreciated by P15,000 and that of AA by P45,000. Allowances for doubtful accounts is to be set up amounting to P120,000 for MM and P40,000 for AA. The partnership agreement provides for the proft and loss ratio and capital interest of 60% to MM and 40% to AA with AA's capital as base. How much cash must MM invest to bring the partner's capital balances proportionate to their profit and loss ratio?