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record the share in the profit

record the share in the profit

FINANCIAL ACCOUNTING
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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Determine net income and record the share in the profit

On March 1, 2021 Aika and Jill formed a partnership with Aika contributing P900,000 cash and Jill contributing land valued at P300,000 and a building valued at P500,000. The partnership will assume Jill's P200,000 long-term note payable associated with land and building. The partners agree to share income on a 3:2 basis, respectively. Before the year ended, Aika and Jill withdrew cash of P30,000 and P25,000 respectively. At the end of the year, total revenues amounted to 475,000 and total operating expenses amounted to P125,000. Prepare journal entries to record the partners' (a) initial capital investments, (b) cash withdrawals, and (c) determine net income and record the share in the profit.
Transcribed Image Text:On March 1, 2021 Aika and Jill formed a partnership with Aika contributing P900,000 cash and Jill contributing land valued at P300,000 and a building valued at P500,000. The partnership will assume Jill's P200,000 long-term note payable associated with land and building. The partners agree to share income on a 3:2 basis, respectively. Before the year ended, Aika and Jill withdrew cash of P30,000 and P25,000 respectively. At the end of the year, total revenues amounted to 475,000 and total operating expenses amounted to P125,000. Prepare journal entries to record the partners' (a) initial capital investments, (b) cash withdrawals, and (c) determine net income and record the share in the profit.
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