Rhea Diaz and Fe De la Cruz Partnership had a profit of P500,000 for the year ended 2019 the first year of operations. the partnership contract provided that each partner may withdraw P10,000 on the last day of each month; both partners did so duirng the year. the drawings are recorded by debits to the parners' drawing accounts and shall not be considered in the division of profits or loss. it is the intention of the partners that each partner's share in the profits or loss be either credited or debited to the drawing account. Diaz invested P400,000 on Jan 1, 2019 and an additional P200,000 on April 1, 2019. De la Cruz invested P600,000 on Jan 1, 2019 and withdrew P200,000 on July 1. These transactions are summarized below: Summary of Accounts Diaz Capital De la Cruz Capital Jul. 1 200,000 I Jan1.600,000 I Jan.1- P400,000 I Apr.1- 200,000 Diaz Drawing De la Cruz Drawing Jan.-Dec. P120,000 I Jan. to Dec. P120,000 I Income Summary I Dec. 31 - P500,000 How should the profit distributions under the diffirent profit sharing above be recorded under the following cases? 1.Equally or in other agreed ratio 2. Based on partners capital contributions a.ratio of original capital b. ratio of original capital balances at the beg. of the year c. ratio of capital balances at the end of the year d. ratio of average capital balances
Rhea Diaz and Fe De la Cruz Partnership had a profit of P500,000 for the year ended 2019 the first year of operations. the partnership contract provided that each partner may withdraw P10,000 on the last day of each month; both partners did so duirng the year. the drawings are recorded by debits to the parners' drawing accounts and shall not be considered in the division of profits or loss. it is the intention of the partners that each partner's share in the profits or loss be either credited or debited to the drawing account. Diaz invested P400,000 on Jan 1, 2019 and an additional P200,000 on April 1, 2019. De la Cruz invested P600,000 on Jan 1, 2019 and withdrew P200,000 on July 1. These transactions are summarized below: Summary of Accounts Diaz Capital De la Cruz Capital Jul. 1 200,000 I Jan1.600,000 I Jan.1- P400,000 I Apr.1- 200,000 Diaz Drawing De la Cruz Drawing Jan.-Dec. P120,000 I Jan. to Dec. P120,000 I Income Summary I Dec. 31 - P500,000 How should the profit distributions under the diffirent profit sharing above be recorded under the following cases? 1.Equally or in other agreed ratio 2. Based on partners capital contributions a.ratio of original capital b. ratio of original capital balances at the beg. of the year c. ratio of capital balances at the end of the year d. ratio of average capital balances
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Please answer number 1 and letter d
Transcribed Image Text:12:14 O d V y •
(79
f Accounting fo..
PROBLEM
Rhea Diaz and Fe De la Cruz Partnership had a profit of P500,000 for the year
ended 2019 the first year of operations. the partnership contract provided that
each partner may withdraw P10,000 on the last day of each month; both partners
did so duirng the year. the drawings are recorded by debits to the parners' drawing
accounts and shall not be considered in the division of profits or loss. it is the
intention of the partners that each partner's share in the profits or loss be either
credited or debited to the drawing account.
Diaz invested P400,000 on Jan 1, 2019 and an additional P200,000 on April 1,
2019. De la Cruz invested P600,000 on Jan 1, 2019 and withdrew P200,000 on July
1.
These transactions are summarized below:
Summary of ACcounts
Diaz Capital
De la Cruz Capital
I Jan.1- P400,000
Jul. 1 200,000 I Jan1.600,000
I Apr.1- 200,000
Diaz Drawing
De la Cruz Drawing
Jan.-Dec. P120.000 I
Jan. to Dec. P120,000 I
Income Summary
I Dec. 31 - P500,000
How should the profit distributions under the diffirent profit sharing
above be recorded under the following cases?
1.Equally or in other agreed ratio
2. Based on partners capital contributions
a.ratio of original capital
b. ratio of original capital balances at the beg. of the year
c. ratio of capital balances at the end of the year
d. ratio of average capital balances
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