Advanced Accounting Dayag Solution Manual PDF

Preview

Summary

Warning: TT: undefined function: 32...

Description

Adva nc e d Ac c ounting So lutio n M a nua l Anto nio J. Da ya g

C ha pte r 1

Pro b le m I Re q uire me nt 1: Assuming tha t A a nd B a g re e tha t e a c h p a rtne r is to re c e ive a c a p ita l c re d it e q ua l to

the a g re e d va lue s o f the n e t a sse ts e a c h p a rtne r inve ste d : To re c o rd a d justm e nts: no thing to a d just sinc e b o th o f the m ha v e no se t o f b o o ks. To c lo se the b o o ks: no thing to c lo se sinc e b o th o f the m ha ve no se t o f b o o ks. To re c o rd inve stm e nts:

Pa rtne rship b o o ks:

C a sh………………………………………………………………………………. 120,000 Inve nto ry…………………………………………………………………………. 120,000 Eq uip m e nt……………………………………………………………………….. 240,000 A, c a p ita l………………………………………………………………...

480,000

Initia l inve stm e nt.

C a sh……………………………………………………………………………….. 120,000 La nd ……………………………………………………………………………….. 240,000 Build ing ……………………………………………………………………………. 480,000 Mo rtg a g e p a ya b le …………………………………………………….

240,000

B, c a p ita l………………………………………………………………..

600,000

Initia l inve stm e nt.

Re q uire me nt 2: Assuming tha t A a nd B a g re e tha t e a c h p a rtne r is to re c e iv e a n e q ua l c a pita l inte re st. To re c o rd a djustm e nts: n o thing to a d just sinc e b o th o f the m ha v e no se t o f b o o ks. To c lo se the b o o ks: no thing to c lo se sinc e b o th o f the m ha ve no se t o f b o o ks. To re c o rd inve stm e nts:

Pa rtne rship b o o ks: Bo nus Appro a c h:

C a sh…………………………………………………………………………… 120,000 Inve nto ry……………………………………………………………………… 120,000 Eq uip m e nt……………………………………………………………………. 240,000 A, c a p ita l……………………………………………………………..

480,000

C a sh…………………………………………………………………………… 120,000 La nd ……………………………………………………………………………. 240,000 Build ing ………………………………………………………………………… 480,000 Mo rtg a g e p a ya b le ………………………………………………… B, c a p ita l.……………………………………………………….……

240,000 600,000

B, c a p ita l……………………………………………………………………….. 60,000 A, c a p ita l………………………………………………………………

60,000

To ta l a g re e d c a p ita l (P480,000 + P600,000)….P 1,080,000 Multip lie d b y: C a pita l inte re st (e q ua l)………...

1/ 2

Pa rtne r’ s ind ivid ua l c a p ita l inte re st…………….P 540,000 Le ss: A’ s c a p ita l inte re st………………………..….480,000 Bo n us to A…….……………………………………..P 60,000

Re va lua tio n (G o o d will) App roa c h:

C a sh…………………………………………………………………………… 120,000 Inve nto ry……………………………………………………………………… 120,000 Eq uip m e nt………………………………………………………………… .... 240,000 A, c a p ita l……………………………………………………………..

480,000

C a sh…………………………………………………………………………… 120,000 La nd ……………………………………………………………………………. 240,000 Build ing ………………………………………………………………………... ..480,000 Mo rtg a g e p a ya b le …………………………………………………

240,000

B, c a p ita l.……………………………………………………….……

600,000

Asse ts ( o r g o o d will o r inta ng ib le a sse t)…………………………………... 120,000 A, c a p ita l…………………..………………………………………..

120,000

To ta l a g re e d c a p ita l ( P600,000 / 1/2)………..….

P1,200,000

Le ss: To ta l c o ntrib ute d c a p ita l ( P480,000 + P 600,000)………………………………....… 1,080,000 Go o d will to A……………..………………………….

P 120,000

Pro b le m II

Inve ste d Ag re e d Fa ir Va lue s C a sh

Inve ste d

Inve ste d

b y Jo hn

b y Je ff

b y Ja ne

P100,000

---

---

P 110,000

---

P 110,000

0

30,000

---

Eq uip me nt To ta l a sse ts

100,000

No te p a ya b le a ssume d b y p a rtne rship

---

Ne t a sse ts inve ste d

P100,000

P

80,000

P

0

2. G o o d will M e tho d (Re va lua tio n o f Asse t)

1. Bo nus M e tho d

C a sh

100,000 110,000

C a sh

100,000

Eq uip me nt

Eq uip me nt

110,000

G o o d w ill

90,000

No te Pa ya b le

30,000

No te Pa ya b le

30,000

Jo hn, C a pita l

60,000

Jo hn, C a pita l

90,000

Je ff, C a pita l

60,000

Je ff, C a pita l

90,000

Ja ne , C a p ita l

60,000

Ja ne , C a p ita l

90,000

2. The b o nus m e tho d is use d w he n Jo hn a nd Je ff re c o g nize tha t Ja ne is b ring ing so m e thing o f v a lue to the firm o the r tha n a ta ng ib le a sse t, b ut the y d o no t w a nt to re c o g nize a n inta ng ib le a sse t. To e q ua lize the c a pita l a c c o unts, P40,000 is tra nsfe rre d fro m Jo hn's c a p ita l a c c o unt a nd P20,000 is tra nsfe rre d fro m Je ff's c a p ita l a c c o unt.

The g o o d w ill me tho d is use d whe n the p a rtne rs re c o g nize the inta ng ib le na ture o f the skills Ja ne is b ring ing to the p a rtne rship . Ho w e ve r, the c a p ita l a c c o unts a re e q ua lize d b y re c o g nizing a n inta ng ib le a sse t a nd a c o rre sp o nd ing inc re a se in the c a p ita l a c c o unts o f the p a rtne rs. Unle ss the

inta ng ib le a sse t c a n b e sp e c ific a lly id e ntifie d , suc h a s a p a te nt b e ing inv e ste d , it sho uld no t b e re c o g nize d , b e c a use o f a la c k o f justific a tio n fo r g o o d w ill in a ne w b usine ss.

Pro b le m III

1.

(a )

C a sh

13,000

Ac c o unts Re c e iv a b le

8,000

O ffic e Sup p lie s

2,000

O ffic e Eq uip me nt

30,000

Ac c o unts Pa ya b le

2,000

To m , C a p ita l

C a sh

12,000

Ac c o unts Re c e iva b le O ffic e Sup p lie s La nd

(b )

51,000

6,000 800 30,000

Ac c o unts Pa ya b le

5,000

Mo rtg a g e Pa ya b le

18,800

Julie , C a pita l

25,000

To m , Dra wing

15,000

C a sh

Julie , Dra w ing

15,000

12,000

C a sh

(c )

Inc o m e Summ a ry

12,000

50,000

To m , C a p ita l P50,000 (P51,000/ P76,000)

33,553

Julie , C a p ita l P50,000 (P25,000/ P76,000)

16,447

To m , C a p ita l

15,000

Julie , C a pita l

12,000

To m , Dra wing

15,000

Julie , Dra w ing

12,000

2.

TO M AND JULIE PARTNERSHIP

Sta te m e nt o f C ha ng e s in Pa rtne rs' C a pita l Fo r the Ye a r End e d De c e m b e r 31, 20x4

To m

Julie

0

P0

Ad d : Ad d itio na l inv e stme nts

51,000

25,000

76,000

Ne t inc o m e a llo c a tio n

33,553

16,447

50,000

P 84,553

P 41,447

P126,000

15,000

12,000

27,000

P 69,553

P 29,447

P99,000

C a pita l b a la nc e s, Ja n. 1

To ta ls Le ss: Withd ra wa ls C a pita l b a la nc e s, De c . 31

P

To ta l P

0

Pro b le m IV Bo o k o f H is to be re ta ine d b y the ne w p a rtne rship .

The fo llo w ing p ro c e d ure s a re to b e fo llo w e d : Ind iv id ua l ve rsus So le Pro p rie to r Bo o ks o f

*Bo o ks o f

Ind iv id ua l

So le Pro p rie to r

Ad justing e ntrie s

N/ A

Ye s

C lo sing e ntrie s (re a l a c c o unts)

N/ A

No

Inve stme nts

Ye s**

Ba la nc e She e t

Ye s

* Bo o ks o f H; Pa rtne rship b o o ks ** Inve stme nts o f ind ivid ua l; a d d itio na l inv e stme nts o r w ithd ra w a ls o f so le p ro p rie to r.

1. Bo o ks o f So le Pro prie to r (H): a . To re c o rd a djustm e nts:

a . H, c a p ita l………………………………………………………………… 1,800 Allo wa nc e fo r d o ub tful a c c o unts……………………………. Ad d itio na l p ro visio n c o m p ute d a s fo llo ws: Re q uire d a llo wa nc e : 10% x P48,000 = P 4,800 Le ss: Pre vio us b a la nc e …………………

3,000

1,800

Add itio na l p ro visio n…………………… P 1,800

b . Inte re st re c e iva b le o r a c c rue d inte re st inc o m e ………………….

3,600

H, c a p ita l……………………………………………………………

3,600

Inte re st inc o m e fo r nine m o nths c o m p ute d a s fo llo ws: P60,000 x 8% x 9/12 = P3,000.

c . H, c a p ita l………………………………………………………………….. 6,000 Me rc ha nd ise inve nto ry…………………………………………..

6,000

De c line in the va lue o f m e rc ha nd ise . P27,000 – P21,000 = P6,000.

d . H, c a p ita l………………………………………………………………….

4,800

Ac c um ula te d d e p re c ia tio n…………………………………….

4,800

Und e r d e p re c ia tio n.

e . Pre p a id e xp e nse s………………………………………………………...

2,400

H, c a p ita l……………………………………………………………

2,400

Exp e nse s p a id in a d va nc e .

H, c a p ita l…………………………………………………………………… 7,200 Ac c rue d e xp e nse s………………………………………………….

7,200

Unre c o rd e d e xp e nse s.

No te : All a d justme nt tha t re fle c ts no m ina l a c c o unts sho uld b e c o urse d thro ug h the

c a p ita l a c c o unt, sinc e a ll no m ina l a c c o unts a re a lre a d y c lo se d a t the tim e o f fo rm a tio n.

b . To c lo se the b o o ks: no thing to c lo se sinc e the b o o ks o f H w ill b e re ta ine d . c . To re c o rd inve stm e nt:

C a sh……………………………………………………………………………. 116,100 I, c a p ita l………………………………………………………………

Initia l inve stm e nt c o m p ute d a s fo llo ws: Una d juste d c a p ita l o f H………………………………P 246,000

116,100

Ad d ( d e d uc t): a d justm e nts: a . Do ub tful a c c o unts...……………………...(

1,800)

b . Inte re st inc o m e ……………………………..

3,600

c . De c line in the va lue o f m e rc ha nd ise ….(

6,000)

d . Und e r-d e p re c ia tio n……………………….(

4,800)

e . Pre p a id e xp e nse s…………………………..

2,400

Ac c rue d e xp e nse s………………………...(

7,200)

Adjuste d c a p ita l b a la nc e o f H……………..……...P 232,200 Divid e d b y: C a p ita l inte re st o f H……………………

2/3

To ta l a g re e d c a p ita l…………………………….…….P 348,300 Multip lie d b y: C a p ita l inte re st o f I……………..……

1/3

Inve stm e nt o f I…………………………………………P 116,100

No te : The initia l inv e stme nt o f H is a lre a d y re c o rd e d sinc e his b o o ks a re a lre a d y

re ta ine d . No furthe r e ntry is re q uire d sinc e the re a re no a d d itio na l inve stme nts o r w ithd ra wa ls m a d e b y H.

2. The b a la nc e she e t fo r b o th c a se s p re se nte d a b o ve is a s fo llo w s:

HI Pa rtne rship Ba la nc e She e t No ve m b e r 1, 20x4

Asse ts C a sh Ac c o unts re c e iv a b le s Le ss: Allo wa nc e fo r d o ub tful a c c o unts………...........

P 236,100 P 48,000 4,800

43,200

No te s re c e iva b le ……...................................................

60,000

Inte re st re c e iva b le ………………..................................

3,600

Me rc ha nd ise Inve nto ry................................................

21,000

Pre p a id e xp e nse s…………..........................................

2,400

Eq uip me nt (ne t)…………............................................. Le ss: Ac c umula te d d e p re c ia tio n………………........ To ta l Asse ts....................................................................

P 72,000 10,800

61,200 P 427,500

Lia b ilitie s a nd C a pita l Lia b ilitie s Ac c rue d e xp e nse s…….. .......................................

P

7,200

Ac c o unts p a ya b le ..................................................

12,000

No te s p a ya b le …………...........................................

60,000

To ta l Lia b ilitie s...............................................................

P 79,200

C a p ita l.......................................................................... H, c a p ita l………………………..................................

P 232,200

I, c a p ita l…………………...........................................

116,100

To ta l C a pita l.................................................................

P 348,300

To ta l Lia b ilitie s a nd C a p ita l..........................................

P 427,500

Pro b le m V Ne w se t of b o o ks. The fo llo w ing p ro c e d ure s a re to b e fo llo w e d :

So le Pro p rie to r ve rsus So le Pro p rie to r Bo o ks o f

Bo o ks o f

So le Pro p rie to r

So le Pro p rie to r

*Ne w Se t o f

(Ba ke r)

(C a rte r)

Bo o ks

Ad justing e ntrie s

Ye s

Ye s

C lo sing e ntrie s (re a l a c c o unts)

Ye s

Ye s

Inve stme nts

Ye s**

Ba la nc e She e t

Ye s

* Pa rtne rship b o o ks ** Ad d itio na l inve stme nts o r w ithd ra w a ls o f so le p ro p rie to rs.

1. Bo o ks o f So le Pro prie to r a . To re c o rd a djustm e nts:

Bo o ks o f J

Bo o ks o f K

a . J, c a p ita l…………………………12,000 Me rc ha nd ise Inve nto ry……

a . Me rc ha nd ise In ve nto ry………… 6,000

12,000

Wo rthle ss inv e nto ry.

K, c a p ita l………………………

6,000

Upw a rd re va lua tio n.

b . J, c a p ita l………………………… 7,200

b . K, c a p ita l……….…………………. 3,000

Allo w a nc e fo r d o ub tful

Allo w a nc e fo r d o ub tful

Ac c o unts…………………..

7,200

Wo rthle ss a c c o unts.

a c c o un ts…………………….

3,000

Ad d itio na l p ro visio n. Re q uire d a llo w a nc e : 5% x P180,000…….. P9,000 Le ss: Pre vio us Ba la nc e ……….. 6,000 Ad d itio na l Pro visio n ....…………P3,000

c . Re n t re c e iva b le …………………12,000

c . K, c a pita l……………………………. 9,600

J, c a p ita l…………………….

Sa la rie s p a ya b le ……………….

12,000

Inc o m e e a rn e d .

9,600

Unp a id sa la rie s. d . Inte re st re c e iva b le …………………1,200 K, c a p ita l………….................. Inte re st inc o m e fro m Aug ust 17 to O c to b e r 1. P60,000 x 16% x 45/ 360

e . J, c a p ita l………………………… 8,400 O ffic e sup plie s……………….

8,400

Expire d o ffic e sup p lie s. f. J, c a p ita l………………………… 6,000 Ac c um ula te d d e p re c ia tio n - e q uip m e nt……………… Und e r-d e pre c ia te d .

6,000

1,200

g . K, c a p ita l……………………………12,000 Ac c um ula te d d e p re c ia tio nFurniture a n d fixture s………

12,000

Und e r-d e pre c ia te d . h. J, c a p ita l…………………………. 1,800 Inte re st pa ya b le …………….

1,800

Inte re st e xpe n se fro m July 1 to O c to b e r 1. P60,000 x 12% x 3/ 12 i. Pa te nt………………………………. 48,000 K, c a p ita l……………………..

48,000

Unre c o rd e d p a te nt. Una d juste d c a p ita l o f J…….……….P 372,000

Una d juste d c a p ita l o f K..……………...P432,000

Ad d (d e d uc t): a d justme nts:

Ad d (d e d uc t): a d justme n ts:

a . Wo rthle ss m e rc ha nd ise ……..( 12,000)

a . Me rc ha nd ise re va lua tio n……..

6,000

b . Wo rthle ss a c c o unts………….(

7,200)

b . Wo rthle ss a c c o unts…………….(

3,000)

c . Re nt inc o m e ……………….….

12,000

c . Sa la rie s…………….…….………..(

9,600)

e . O ffic e sup p lie s e xp e nse …….(

8,400)

d . Inte re st inc o me …………………..

1,200

f. Ad d itio na l d e p re c ia tio n……(

6,000)

g . Ad d itio na l d e p re c ia tio n………( 12,000)

h. Inte re st e xp e nse ………………( 1,800)

h. Pa te nt………….……….…………. 48,000

Ad juste d c a p ita l o f J…………………P348,600

Ad juste d c a p ita l o f K….………………..P462,600

b . To c lo se the b o o ks: Bo o ks o f J

Bo o ks o f K

Allo w a nc e fo r d o ub tful

Allo w a nc e fo r d o ub tful

a c c o unts................................. 12,000 Ac c um ula te d d e pre c ia tio n –

a c c o unts.................................

9,000

Ac c um ula te d d e pre c ia tio n –

e q uip me nt…………………… 60,000

furniture a nd fixture s ……….

36,000

Ac c o unts p a ya b le ……………159,600

Ac c o unts p a ya b le ……………. 120,000

No te s p a ya b le ………………… 60,000

Sa la rie s p a ya b le ……………….

Inte re st p a ya b le ………………. 1,800

K, c a p ita l…….…………………. 462,600

J, c a p ita l…….………………….348,600

9,600

C a sh………………………….

54,000 180,000

C a sh…………………………

90,000

Ac c o unts re c e iva b le ……..

Ac c o unts re c e iva b le …….

216,000

No te s re c e iva b le ………….

Me rc ha nd ise inve nto ry….

180,000

Inte re st re c e iva b le ………...

60,000 1,200

O ffic e sup p lie s…………….

24,000

Me rc h a nd ise in ve nto ry…..

150,000

Eq uip me nt………………….

120,000

Furniture a n d fixture s.……..

144,000

Re nt re c e iva b le …………...

12,000

Pa te nt………….…………….

48,000

C lo se the b o o ks o f J.

C lo se the b o o ks o f K..

2. Ne w Se t o f Bo o ks To re c o rd inve stm e nts:

3.

C a sh ……………………………………………………………….

90,000

Ac c o unts re c e iva b le …………………………………………..

216,000

Me rc ha nd ise in ve nto ry………………………………………..

180,000

O ffic e sup plie s…………………………………………………..

24,000

Eq uip me nt (ne t)………………………………………………...

60,000

Re nt Re c e iva b le ………………………………………………..

12,000

Allo w a nc e fo r d o ub tful a c c o unts…………………….<...