Title | Advanced Accounting Guerrero Peralta Volume 1 Solution Manual |
---|---|
Author | Cha Feudo |
Course | Internal Auditing |
Institution | Far Eastern University |
Pages | 189 |
File Size | 3.5 MB |
File Type | |
Total Downloads | 15 |
Total Views | 177 |
Advance accounting solutions...
Partnership – Basic Considerations and Formation
1
CHAPTER 1 MULTIPLE CHOICE ANSWERS AND SOLUTIONS 1-1:
a
1-2:
Jose's capital should be credited for the market value of the computer contributed by him. b (40,000 + 80,000) ÷ 2/3 = 180,000 x 1/3 = 60,000.
1-3:
a
1-4:
Cash Land Mortgage payable
P100,000 300,000 ( 50,000)
Net assets (Julio, capital)
P350,000
Total Capital (P300,000/60%) Perla's interest
P500,000 ______40%
Perla's capital Less:Non-cash asset contributed at market value Land P 70,000 Building 90,000 Mortgage Payable ( 40,000)
P200,000
Cash contribution
P 80,000
b
_120,000
1-5:
d - Zero, because under the bonus method, a transfer of capital is only required.
1-6:
b
1-7:
Reyes
Santos
Cash Inventory Building Equipment Mortgage payable
P200,000 – – 150,000 ________
P300,000 150,000 400,000 ( 100,000)
Net asset (capital)
P350,000
P750,000
AA
BB
CC
Cash Property at Market Value Mortgage payable Equipment at Market Value
P 50,000
_______
P 80,000 ( 35,000) _______
P55,000
Capital
P 50,000
P 45,000
P55,000
c
2
1-8:
1-9:
Chapter 1
a PP
RR
Cash Computer at Market Value
P 50,000 __25,000
P 80,000 _______
P 25,000 __60,000
Capital
P 75,000
P 80,000
P 85,000
Maria
Nora
c Cash Merchandise inventory Computer equipment Liability Furniture and Fixtures
P 30,000
Total contribution
1-10:
1-12:
200,000
P 90,000 160,000 ( 60,000) ________
P230,000
P190,000
Total agreed capital (P230,000/40%) Nora's interest
P575,000 ______60%
Nora's agreed capital Less: investment
P345,000 190,000
Cash to be invested
P155,000
d Roy
1-11:
SS
Sam
Tim
Cash Office Equipment Note payable
P140,000 – ________
– P220,000 _( 60,000)
– – ______
Net asset invested
P140,000
P160,000
P
Agreed capitals, equally (P300,000/3) =
P100,000
Lara
Mitra
Cash Computer equipment Note payable
P130,000 – ________
P200,000 50,000 _( 10,000)
Net asset invested
P130,000
P240,000
Goodwill (P240,000 - P130,000) =
P110,000
a
a Perez
Reyes
Cash Office Equipment Merchandise Furniture Notes payable
P 50,000 30,000 – _______
P 70,000 – 110,000 100,000 ( 50,000)
Net asset invested
P 80,000
P230,000
–
Partnership – Basic Considerations and Formation
3
1-12: Continued Bonus Method: Total capital (net asset invested)
P310,000
Goodwill Method: Net assets invested Add: Goodwill (P230,000-P80,000)
P310,000 _150,000
Net capital 1-13:
1-14:
b Required capital of each partner (P300,000/2) Contributed capital of Ruiz: Total assets P105,000 Less Liabilities __15,000
__90,000
Cash to be contributed by Ruiz
P 60,000
P150,000
d Total assets: Cash Machinery Building Less: Liabilities (Mortgage payable)
1-15:
P460,000
P 70,000 75,000 _225,000
P370,000 __90,000
Net assets (equal to Ferrer's capital account) Divide by Ferrer's P & L share percentage
P280,000 ____70%
Total partnership capital
P400,000
Required capital of Cruz (P400,000 X 30%) Less Assets already contributed: Cash P 30,000 Machinery and equipment 25,000 Furniture and fixtures __10,000
P120,000
Cash to be invested by Cruz
P 55,000
__65,000
d Adjusted assets of C Borja Cash P 2,500 Accounts Receivable (P10,000-P500) 9,500 Merchandise inventory (P15,000-P3,000) 12,000 Fixtures __20,000 Asset contributed by D. Arce: Cash P 20,000 Merchandise __10,000
__30,000
Total assets of the partnership
P 74,000
P 44,000
4
1-16:
Chapter 1
a Cash to be invested by Mendez: Adjusted capital of Lopez (2/3) Unadjusted capital Adjustments: Prepaid expenses Accrued expenses Allowance for bad debts (5% X P100,000)
P158,400 17,500 ( 5,000) _( 5,000)
Adjusted capital
P165,900
Total partnership capital (P165,900/2/3) Multiply by Mendez's interest
P248,850 ⅓
Mendez's capital Less Merchandise contributed
P 82,950 __50,000
Cash to be invested by Mendez
P 32,950
Total Capital: Adjusted capital of Lopez Contributed capital of Mendez
P165,900 __82,950
Total capital 1-17:
P248,850
d Moran, capital (40%) Cash Furniture and Fixtures Divide by Moran's P & L share percentage
P 15,000 _100,000
Total partnership capital Multiply by Nakar's P & L share percentage Required capital of credit of Nakar: Contributed capital of Nakar: Merchandise inventory Land Building Total assets Less Liabilities Required cash investment by Nakar 1-18:
P115,000 ______40% P287,500 ______60% P172,500
P 45,000 15,000 __65,000 P125,000 __30,000
P 95,000 P 77,500
c Garcia's adjusted capital (see schedule 1) Divide by Garcia's P & L share percentage
P40,500 ______40%
Total partnership capital Flores' P & L share percentage
P101,250 ______60%
Flores' capital credit Flores' contributed capital (see schedule 2)
P 60,750 __43,500
Additional cash to be invested by Flores
P 17,250
Partnership – Basic Considerations and Formation
5
1-18: Continued Schedule 1: Garcia, capital: Unadjusted balance Adjustments: Accumulated depreciation Allowance for doubtful account
P 49,500 ( 4,500) ( 4,500)
Adjusted balance
P 40,500
Schedule 2: Flores capital: Unadjusted balance Adjustments: Accumulated depreciation Allowance for doubtful accounts
P 57,000 ( 1,500) ( 12,000)
Adjusted balance 1-19:
P 43,500
d Ortiz
Ponce
Total
( 60%) ( 40%) P133,000 P108,000 P241,000
Unadjusted capital balances Adjustments: Allowance for bad debts Inventories Accrued expenses
( 2,700) 3,000 _( 2,400)
Adjusted capital balances
P130,900
( 1,800) 2,000 ( 1,600) P106,000
( 4,500) 5,000 ( 4,000) P237,500
Total capital before the formation of the new partnership (see above) P237,500 Divide by the total percentage share of Ortiz and Ponce (50% + 30%) ______80%
1-20:
Total capital of the partnership before the admission of Roxas Multiply by Roxas' interest
P296,875 ______20%
Cash to be invested by Roxas
P 59,375
d Merchandise to be invested by Gomez: Total partnership capital (P180,000/60%)
P300,000
Gomez's capital (P300,000 X 40%) Less Cash investment
P120,000 __30,000
Merchandise to be invested by Gomez
P 90,000
Cash to be invested by Jocson: Adjusted capital of Jocson: Total assets (at agreed valuations) Less Accounts payable Required capital of Jocson Cash to be invested by Jocson
P180,000 __48,000
P132,000 _180,000 P 48,000
6
Chapter 1
1-21:
b
1-22:
1-23:
1-24:
1-25:
Unadjusted Ell, capital (P75,000 – P5,000) Allowance for doubtful accounts Accounts payable
P 70,000 ( 1,000) ( 4,000)
Adjusted Ell, capital
P 65,000
Total partnership capital (P113,640/1/3) Less Divino's capital
P340,920 _113,640
Cortez's capital after adjustments Adjustments made: Allowance for doubtful account (2% X P96,000) Merchandise inventory Prepaid expenses Accrued expenses
P227,280
Cortez's capital before admission of Divino
P211,200
c
1,920 ( 16,000) ( 5,200) ___3,200
a Total assets at fair value Liabilities Capital balance of Flora
P4,625,000 (1,125,000) P3,500,000
c Total capital of the partnership (P3,500,000 ÷ 70%) Eden agreed profit & loss ratio Eden agreed capital Eden contributed capital at fair value Allocated cash to be invested by Eden
P5,000,000 30% 1,500,000 812,000 P 688,000
c __Rey __Sam_ __Tim __Total_ Contributed capital (assets-liabilities)P471,000 P291,000 P195,000 P957,000 Agreed capital (profit and loss ratio) 382,800 382,800 191,400 957,000 Capital transfer (Bonus) P 88,200 P(91,800) P 3,600 -
1-26:
d Total agreed capital (P90,000 ÷ 40%) Contributed capital of Candy (P126,000+P36,000-P12,000) Total agreed capital (P90,000 ÷ 40%) Candy, agreed capital interest Agreed capital of Candy Contributed capital of Candy Withdrawal of Candy
P225,000 150,000 225,000 60% 135,000 150,000 P 15,000
Partnership – Basic Considerations and Formation
1-27:
1-28:
a Total agreed capital (210,000 ÷ 70%) Nora’s interest Agreed capital of Nora Cash invested Merchandise to be invested by Nora
P300,000 30% P 90,000 42,000 P 48,000
a Contributed capital of May (P194,000 - P56,000) Agreed capital of May (P300,000 x 70%) Cash to be invested by May
P138,000 210,000 P 72,000
1-29:
d
1-30:
b
Zero, because the bonus method involves only a transfer of capital.
Cash Accounts receivable- Net Merchandise inventory Computer equipment Furniture and fixtures Total assets at fair value Accounts payable Net assets invested Agreed capital Goodwill (withdrawal) 1-31:
Noy 10,000 92,000 216,000 24,000 18,000 360,000 (108,000) 252,000 250,000 P (2,000) P
Bi P 14,000 92,000 150,000 14,000 ---270,000 (72,000) 198,000 200,000 P 2,000
c Cash Office equipment Merchandise inventory Notes payable Contributed capital Agreed capital Bonus to Roxas
1-32:
7
Villar P 2,205,000 630,000 ( 210,000) 2,625,000 2,520,000 P( 105,000)
b Total capital before adjustments (P210,750 + P103,000) Allowance for doubtful accounts Accumulated depreciation (P1,000 – P500) Obsolete inventory Total assets of the partnership
Roxas P
1,575,000 1,575,000 1,680,000 P 105,000 P313,750 ( 10,000) 500 ( 3,500) P300,750
8
1-33:
Chapter 1
b Cash Accounts receivable Merchandise inventory Equipment Accounts payable Notes payable Contributed capital Loss on sale of equipment Net assets Additional investment by Edu Agreed capital
1-34:
1-36:
Edu P136,800 129,600 216,000 (96,000) 386,400 1,800 388,200 20,400 P408,600
Garnett P2,443,364 ( 80,000) ( 108,000) 2,255,364 2,255,364 P -
Bryant P3,097,528 200,000 ( 140,000) 3,157,528 1,503,576* P 1,653,952
a Unadjusted capital Accumulated depreciation Accounts receivable written off Adjusted capital contributed Agreed capital Capital withdrawal
1-35:
Gibo P 19,200 163,200 240,000 60,000 (60,000) (12,000) 410,400 (1,800) 408,600 P408,600
* Total agreed capital (P2,255,364 / 60%) Bryant’s interest Agreed capital of Bryant
P3,758,940 40% P1,503,576
a Total capital Total liabilities Total assets
P3,758,940 4,299,396 P8,058,336
a Unadjusted capital Undervaluation of inventory Allowance for doubtful accounts Accrued expenses Contributed capital Agreed capital of Gordon (P285,000/75%) x 25% Capital withdrawal by Gordon
Gordon P220,000 11,000 (2,750) 228,250 133,250 P 95,000
Fernando P309,375 ( 4,125) (20,250) 285,000 285,000 P -
Partnership – Basic Considerations and Formation
9
SOLUTIONS TO PROBLEMS Problem 1 – 1 1.
a. Books of Pedro Castro will be retained by the partnership To adjust the assets and liabilities of Pedro Castro. 1. Pedro Castro, Capital ............................................................. Merchandise Inventory ......................................................
600
2. Pedro Castro, Capital ............................................................. Allowance for Bad Debts ..................................................
200
3. Accrued Interest Receivable .................................................. Pedro Castro, Capital.........................................................
35
Computation: P1,000 x 6% x 3/12 = P2,000 x 6% x 2/12 =
600
200
35
P15 _20
Total ......................... ...... P35 4. Pedro Castro, Capital ............................................................. Accrued Interest Payable ................................................... (P4,000 x 5% x 6/12 = P100)
100
5. Pedro Castro, Capital ............................................................. Accumulated Depreciation – Furniture and Fixtures ........
800
6. Office Supplies ...................................................................... Pedro Castro, Capital.........................................................
400
100
800
400
To record the investment of Jose Bunag. Cash.. ........................................................................................... 15,067.50 Jose Bunag, Capital ............................................................... Computation: Pedro Castro, Capital (1) P600 P31,400 (2) 200 35 (3) (4) 100 400 (6) (5) ___800 P1,700 P31,835 P30,135 Jose Bunag, Capital : 1/2 x P30,135 = P15,067.50
15,067.50
10
b.
Chapter 1
A new set of books will be used Books of Pedro Castro To adjust the assets and liabilities. See Requirement (a). To close the books. Notes Payable ............................................................................... Accounts Payable ......................................................................... Accrued Interest Payable .............................................................. Allowance for Bad Debts ............................................................. Accumulated Depreciation – Furniture and Fixtures ................... Pedro Castro, Capital ................................................................... Cash ....................................................................................... Notes Receivable ................................................................... Accounts Receivable ............................................................. Accrued Interest Receivable .................................................. Merchandise Inventory .......................................................... Office Supplies ...................................................................... Furniture and Fixtures............................................................
4,000 10,000 100 1,200 1,400 30,135 6,000 3,000 24,000 35 7,400 400 6,000
New Partnership Books To record the investment of Pedro Castro. Cash ........................................................................................... Notes Receivable .......................................................................... Accounts Receivable .................................................................... Accrued Interest Receivable......................................................... Merchandise Inventory................................................................. Office Supplies ............................................................................. Furniture and Fixtures .................................................................. Notes Payable ........................................................................ Accounts Payable................................................................... Accrued Interest Payable ....................................................... Allowance for Bad Debts....................................................... Accumulated Depreciation – Furniture and Fixtures............. Pedro Castro, Capital .............................................................
6,000 3,000 24,000 35 7,400 400 6,000 4,000 10,000 100 1,200 1,400 30,135
To record the investment of Jose Bunag. Cash .. ........................................................................................... 15,067.50 Jose Bunag, Capital ...............................................................
15,067.50
Partnership – Basic Considerations and Formation
2.
11
Castro and Bunag Partnership Statement of Financial Position October 1, 2011 Assets
Cash ..... ...... ... ........................................................................................... Notes receivable .......................................................................................... Accounts receivable .................................................................................... P 24,000 Less Allowance for bad debts...................................................................... ___1,200 Accrued interest receivable ......................................................................... Merchandise inventory ................................................................................ Office supplies ........................................................................................... Furniture and fixtures .................................................................................. 6,000 Less Accumulated depreciation ................................................................... ___1,400 Total Assets ........................................................................................
P21,067.50 3,000.00 22,800.00 35.00 7,400.00 400.00 __4,600.00 P59,302.50
Liabilities and Capital Notes payable ........................................................................................... Accounts payable ........................................................................................ Accrued interest payable ............................................................................. Pedro Castro, Capital................................................................................... Jose Bunag, Capital ..................................................................................... Total Liabilities and Capital ..............................