Title | Chapter 1 SOLMAN baysa lupisan |
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Course | Accounting |
Institution | Far Eastern University |
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Partnership Formation and OperationsTo record contributions of TomasReq. 2. Campos and Tomas PartnershipSantos Abad Total Mercado Puzon Total 8% interest on beg capital P 48,000 P 54 P102, Salaries 225,000 112,500 337, Balance 3:2 ( 38,700) ( 25,800) ( 64,500) Net Profit P234,300 P140,700 P375, Merc...
CHAPTER 1 Partnership Formation and Operations EXERCISES Exercise 1 –1 1.a
Campos, Capital Allowance for Uncollectible Accounts
14,000
Goodwill Campos, Capital
30,000
14,000 30,000
Accumulated Depreciation Campos, Capital Furniture and Fixtures
1.b
6,000 6,500 12,500
Campos, Capital Cash
40,000
Cash (P83,500 x 1/2) Tomas, Capital To record contributions of Tomas
41,750
40,000 41,750
Req. 2. Campos and Tomas Partnership Statement of financial Position July 1, 2008
Assets Cash Accounts Rec’l Less Allowance for Uncol Accts. Inventory Furniture Goodwill TOTAL ASSETS
Liabilities & Owners’ Equity P41,750 P60,000 24,000
Accounts Payable Campos, Capital Tomas, Capital
P90,000 83,500 41,750
36,000 100,000 7,500 30,000 P215.250
________ TOTAL LIABILITIES & OWNERS’ EQUITY
P215,250
Exercise 1-2 1.
2.
Cash Accounts Receivable Merchandise Inventory Equipment Allowance for Uncollectible Accounts Accounts Payable Notes Payable Bernal, Capital Cash Camino, Capital
90,000 36,000 54,000 25,000 2,000 21,000 18,000 164,000 100,000 100,000
AA 1 - Chapter 1 (2008 edition)
page 2
Exercise 1 –3 1.
2.
Cash Land Building Legaspi, Capital Sabino, Capital
800,000 540,000 900,000
Cash Land Building Legaspi, Capital Sabino, Capital
800,000 540,000 900,000
800,000 1,440,000
1,120,000 1,120,000
Exercise 1 - 4 1.
2.
Income Summary Santos, Capital (P238,000 x 260/425) Abad, Capital (P238,000 x 165/425)
238,000
Income Summary Santos, Capital (P238,000 x 3,125/5,000) Abad, Capital (P238,000 x 1,875/5,000)
238,000
145,600 92,400 148,750 89,250
Santos: Jan. 1 – Mar. 31 Apr. 1 – Apr. 30 May 1 – July 31 Aug. 1 – Dec. 31
P260,000 x 3 290,000 x 1 360,000 x 3 320,000 x 5
P780,000 290,000 1,080,000 1,600,000 P3,750,000/12
P312,500
Abad: Jan. 1 – May 31 June 1 – Aug. 31 Sept.1 – Dec. 31 3.
P825,000 645,000 780,000 P2,250,000/12
Income Summary Santos, Capital Abad, Capital Interest on ave. capital Salaries to partners Balance - equally Net Profit
4.
P165,000 x 5 215,000 x 3 195,000 x 4
238,000 147,750 90,250 Santos P 18,750 150,000 ( 21,000) P 147,750
Abad Total 11,250 P 30,000 100,000 250,000 ( 21,000) (42,000) P 90,250 P238 000 P
Income Summary Santos, Capital Abad, Capital
238,000 164,840 73,160 Santos
Bonus to Santos
P187,500
Abad
Total
AA 1 - Chapter 1 (2008 edition)
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25% (P238,000 - B) Interest of 6% on excess average investment 6% (P312,500 - P187,500) Balance - 3:2 Net Profit
5.
P 47,600 7,500 109,740 P 164,840
P 47,600
73,160 P73,160
Income Summary Santos, Capital (P238,000 x 15/25) Abad, Capital (P238,000 x 10/25)
7,500 182,900 P238,000
238,000 142,800 95,200
Exercise 1 – 5 Sanchez and Gomez Schedule of Distribution of Net Profit December 31, 2008 Sanchez Gomez 6% interest on average capital P 6,246 P 14.440 10% bonus on net profit after interest 8,331 Salaries 20,000 30,000 Balance – 70%, 30% 17,488 7,495 Net Profit P52,065 P51,935
Total P 20,686 8,331 50,000 24,983 P104,000
Computation of average capital: Jan. 1 Apr. 1
Sanchez, Capital P81,600 x 3 P 244,800 P111,600 x 9 1,004,400 P1,249,200
Ave. capital (P1,249,200/12)
P104,100
Jan. 1 Aug. 1
Gomez, Capital P224,000 x 7 P1,568,000 P264,000 x 5 1,320,000 P2,888,000
Ave. capital (P2,888,000/12)
P240,667
Computation of bonus: P160,000 x 65%= P104,000– P20,686 x 10% = P8,331 2. Sanchez and Gomez Statement of Partners’ Capital For the Year Ended December 31, 2008 Capital, January 1 Additional investment Net profit Drawings Capital, December 31
3. 6% interest on average capital 10% bonus on net profit after interest Balance – Salary ratio Net Profit Exercise 1-6
Sanchez P 81,600 30,000 52,065 ( 41,600) P122,065
Gomez P224,000 40,000 51,935 ( 41,600) P274,335
Total P305,600 70,000 104,000 ( 83,200) P396,400
Sanchez P 6,246 8,331 34,083 P48,660
Gomez P14.440
Total P 20,686 8,331 74,983 P104,000
40,000 P 55,340
AA 1 - Chapter 1 (2008 edition)
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1. 8% interest on beg capital Salaries Balance 3:2 Net Profit
Mercado P 48,000 225,000 ( 38,700) P234,300
Puzon P 54.000 112,500 ( 25,800) P140,700
Total P102,000 337,500 ( 64,500) P375,000
8% interest on beg capital Balance – Salary ratio Net Profit
Mercado P 48,000 182,000 P230,000
Puzon P 54.000 91,000 P145,000
Total P102,000 273,000 P375,000
2.
3.
Puzon P375,000 x 2/3 = P150,000; however, minimum guaranteed amount is P160,000 Mercado P375,000 – P160,000 = P215,000
Exercise 1 – 7 Net profit after salary, interest and bonus Interest P200,000 x 10% Salary P8,000 x 12 Net profit before interest and salary Bonus rate Amount of bonus to Lirio
P374,000 P20,000 96,000
116,000 P490,000 x 25% P122,500
Exercise 1 – 8 1.
B = .25 x P500,000 = P125,000
2.
B = .25 x P500,000 = P100,000 1.25
3.
B T B B
= = = =
4.
B B B B B
= .25 (P500,000 - B - Tax) = .25 (P50,0000 - B - P175,000) = P81,250 - .25B = P81,250/1.25 = P65,000
.25 (P500,000 - Tax) .35 x P500,000 = P175,000 .25 (P500,000 – P175,000) P 81,250
Exercise 1 - 9
1. Salary Bonus Interest Balance Total
Estrella P40,000 6,000 10,000 26,900 P82,900
Felipe P20,000 4,000 9,000 26,900 P59,900
Garcia
Jimenez
P 4,000 26,900 P30,900
P 9,400 26,900 P36,300
Total P 60,000 10,000* 32,400 107,600 P210,000
AA 1 - Chapter 1 (2008 edition)
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*B = 5% (P210,000 – B) = P10,000
2. Estrella P40,000 10,000 ( 43,100) P 6,900
Salary Interest Balance Total
Felipe P20,000 9,000 ( 43,100) (P 14,100)
Garcia
Jimenez
P 4,000 ( 43,100) (P39,100)
P 9,400 ( 43,100) (P33,700)
Total P 60,000 32,400 (172,400) (P 80,000)
3. Interest Bonus Salary Total
Estrella P10,000 6,000 25,067 P41,067 *P37,600 x 4/ 6 = P25,067;
Felipe Garcia P 9,000 P 4,000 4,000 12,533 _______ P25,533 P 4,000 P37,600 x 2/ 6 = P12,533
Jimenez P 9,400 ________ P 9,400
Total P 32,400 10,000 37,600* P 80,000
Exercise 1-10 1.
2.
Fees Earned Joseph, Capital Luis, Capital Operating Expenses Income Summary
750,000 50,000
Income Summary Joseph Capital Luis, Capital Nicolas, Capital
500,000
200,000 100,000 500,000 150,000 250,000 100,000
Exercise 1 – 11 1. Capital balances before payment of cash Required capital balances based on on profit and loss ratio Cash received (paid)
Benito
Cabral
Duenas
Total
P120,000
P100,000
P100,000
P320,000
128,000 (P 8,000)
112,000 (P 12,000)
80,000 P 20,000
320,000 -
Journal entry on the partnership books Duenas, Capital Benito, Capital Cabral, Capital
20,000 8,000 12,000
2. Capital balances before additional cash investment Required capital balances based on lowest possible cash investment*
Benito
Cabral
Duenas
Total
P120,000
P100,000
P100,000
P320,000
160,000
140,000
100,000
400,000
AA 1 - Chapter 1 (2008 edition)
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Required additional cash investment P 40,000 P 40,000 P 80,000 * P120,000/40% = P300,000; P100,000/35% = P285,174; P100,000/25% = P400,000 Journal entry on the partnership books Cash Benito, Capital Cabral, Capital
80,000 40,000 40,000
3. Capital balances Required capital Additional investment(withdrawals)
Benito P120,000 120,000 --------
Cabral P100,000 105,000 5,000
Duenas Total P100,000 P320,000 75,000 300,000 (P 25,000) P 20,000
Duenas, Capital Cash Cabral, Capital
25,000 20,000 5,000
Exercise 1 – 12 Enriquez and Flores Schedule Showing Adjustments in Capital For the Year Ended December 31, 2008 Reported net profit Adjustments: Equipment purchased charged to expense Depreciation on equipment Overstatement of 2008 ending inventory
P400,000 P200,000 ( 20,000) ( 24,000) P156,000 x 65%
Corrected net profit
101,400 P501,400
Distribution of 2008 net profit Salaries Interest Balance
Distribution of 2008 corrected net profit Salaries Interest Balance Adjustments 2.
Equipment
Enriquez P120,000 30,000 51,000 P201,000
Flores P120,000 45,000 34,000 P199,000
Total P240,000 75,000 85,000 P400,000
P120,000 30,000 111,840 P261,840 P 60,840
P120,000 45,000 74,560 P239,560 P 40,560
P240,000 75,000 186,400 P501,400 P101,400
200,000
AA 1 - Chapter 1 (2008 edition)
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Enriquez, Capital Flores, Capital Accumulated Depreciation Inventory Income Tax Payable
60,840 40,560 20,000 24,000 54,600 PROBLEMS
Problem 1 – 1 1.
a. b. c.
d.
e.
f. g.
Merchandise, Inventory Ruiz, Capital
60,000
Ruiz, Capital Allowance for Uncollectible Accounts
30,000
60,000 30,000
Interest Receivable Ruiz, Capital P150,000 x 6% x 2/12 = P1,500
1,500
Ruiz, Capital Interest Payable P300,000 x 10% x 3/12 = P7,500
7,500
Accumulated Depreciation Ruiz, Capital Furniture and Fixtures Office Supplies Ruiz, Capital
1,500
7,500 180,000 60,000 240,000 5,000 5,000
Cash Santos, Capital
524,500 524,500 Ruiz and Santos Statement of Financial Position December 1, 2008
Assets Cash Notes Receivable Accounts Receivable Less Allowance for Uncollectible Accounts Interest Receivable Merchandise Inventory Office Supplies Furniture and Fixtures Total Assets Liabilities and Capital Notes Payable Accounts Payable Interest Payable
P P900,000 90,000
P300,000 630,000 7,500
764,500 150,000
810,000 1,500 300,000 5,000 480,000 P2,511,000
AA 1 - Chapter 1 (2008 edition)
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Total Liabilities Ruiz, Capital Santos, Capital Total Capital Total Liabilities and Capital
P 937,500 P1,049,000 524,500 1,573,500 P2,511,000
Problem 1-2 1.
2.
Cash Merchandise Inventory Tomas, Capital
518,000 1,152,000
Accounts Receivable Merchandise Inventory Office Equipment Goodwill Allowance for Uncollectible Accounts Accounts Payable Vicente, Capital
1,792,000 256,000 160,000 198,000
1,670,000
160,000 576,000 1,670,000
Tomas and Vicente Statement of Financial Position June 1, 2008 Assets Cash Accounts Receivable Less Allowance for Uncollectible Accounts Inventories Office Equipment Goodwill Total Assets Liabilities and Capital Accounts Payable Tomas, Capital Vicente, Capital Total Liabilities and Capital
P P1,792,000 160,000
518,000
1,632,000 1,408,000 160,000 198,000 P3,916,000 P 576,000
P1,670,000 1,670,000
3,340,000 P3,916,000
Problem 1 – 3 1.
Merchandise Inventory Goodwill Accumulated Depreciation Allowance for Uncollectible Accounts Equipment Rosas, Capital Cash Accounts Receivable Merchandise Inventory Equipment Furniture and Fixtures
3,000 3,000 900 1,000 2,000 3,900 5,000 46,000 108,000 12,000 9,000
AA 1 - Chapter 1 (2008 edition)
2.
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Goodwill Allowance for Uncollectible Accounts Accounts Payable Perlas, Capital
3,000
Cash Accounts Receivable Merchandise Inventory Equipment Furniture and Fixtures Goodwill Allowance for Uncollectible Accounts Accounts Payable Perlas, Capital
5,000 46,000 108,000 12,000 9,000 3,000
Cash Accounts Receivable Merchandise Inventory Equipment Goodwill Allowance for Uncollectible Accounts Accounts Payable Rosas, Capital
7,000 49,000 75,000 7,000 3,000
Problem 1 – 4 1. Cash Inventories Equipment Notes Payable Serrano, Capital Cash Land Mortgage Payable Torres, Capital
4,000 54,000 125,000
4,000 54,000 125,000
5,000 36,000 100,000 900,000 1,500,000 3,000,000 1,050,000 4,350,000 600,000 6,000,000 1,950,000 4,650,000
Torres, Capital Serrano, Capital
150,000
Purchases Accounts Payable
900,000
Accounts Payable Cash
720,000
Mortgage Payable Interest Expense Cash
300,000 120,000
Notes Payable Interest Expense Cash
225,000 75,000
150,000 900,000 720,000
420,000
300,000
AA 1 - Chapter 1 (2008 edition)
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Accounts Receivable Sales
3,450,000
Cash Accounts Receivable
3,150,000
3,450,000 3,150,000
Selling and General Expenses Cash Accumulated Depreciation Accrued expenses
870,000
Serrano, Drawing Torres, Drawing Cash
351,000 351,000
Income Tax Income Tax Payable
204,750
630,000 150,000 90,000
702,000 204,750
Inventories, end Sales Inventories, beginning Purchases Selling and General Expenses Interest Expense Income Tax Income Summary
600,000 3,450,000 1,500,000 900,000 870,000 195,000 204,750 380,250
Income Summary Serrano, Capital Torres, Capital Interest on beginning capital Salaries Remainder – 60%, 40% Net Profit
Serrano, Capital Torres, Capital Serrano, Drawing Torres, Drawing
380,250 192,150 188,100 Serrano
Torres
Total
P180,000 150,000 ( 137,850) P192,150
P180,000 100,000 ( 91,900) P188,100
P360,000 250,000 ( 229,750) P380,250
351,000 351,000 351,000 351,000
Serrano and Torres Partnership Statement of Recognized Income and Expenses For the Year Ended December 31, 2008 Sales Cost of Goods Sold: Inventories, beginning Purchases Cost of Goods Available for Sale Less Inventories, end
P3,450,000 P1,500,000 900,000 P2,400,000 600,000
1,800,000
AA 1 - Chapter 1 (2008 edition)
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Gross Profit Selling and General Expenses Operating Income Interest Expense Net Profit before Income Tax Income Tax Net Profit
P1,650,000 870,000 P 780,000 195,000 P 585,000 204,750 P 380,250 Serrano and Torres Partnership Statement of Financial Position December 31, 2008
Assets Current Assets: Cash Accounts Receivable (P3,450,000 – P3,150,000) Inventories Property, Plant and Equipment: Land Equipment P3,000,000 Less Accumulated Depreciation 150,000 Total Assets
P1,878,000 300,000 600,000
P 2,778,000
P6,000,000 2,850,000
8,850,000 P11,628,000
Liabilities Current Liabilities: Accounts Payable (P900,000 – P720,000) Accrued Expenses Income Tax Payable Long-term Liabilities: Notes Payable (P1,050,000 – P225,000) Mortgage Payable (P1,950,000 – P300,000) Total Liabilities
P180,000 90,000 204,750 P 825,000 1,650,000
P
474,750
2,475,000 P 2,949,750
Capital Serrano, Capital Torres, Capital Total Capital
P4,341,150 4,337,100 8,678,25 0 P11,628,000
Total Liabilities and Capital Problem 1 - 5
1. P2,700,000 (P200,000 + P1,100,000 + P500,000 + P1,500,000 – P600,000 = P2,700,000) 2 P2,600,000. (P2,500,000 + P2,700,000) / 2 = P2,600,000 Problem 1 – 6 1.
Income Summary Bernabe, Capital Burgos, Capital
700,000 505,800 194,200
AA 1 - Chapter 1 (2008 edition)
Interest on beg. capital Balance – 3:1 Net Profit 2.
Bernabe: Jan. 1 – May 31 June 1 – Oct. 31 Nov, 1 – Dec. 31
284,000 416,000 Bernabe P 140,000 48,000 96,000 P 284,000
Burgos P 260,000 60,000 96,000 P 416,000
Total P400,000 P108,000 96,000 P700 000 700,000 394,150 305,850
Bernabe P 90,000 49,000 255,150 P 394,150
P360,000 x 5 460,000 x 5 400,000 x 2
P440,000 x 6
July 1 – Oct. 31 Nov.1 – Dec. 31
360,000 x 4 500,000 x 2
Burgos 170,000 50,800 85,050 P 305,850
P
Total P260,000 99,800 340,200 P700 000
P1,800,00 0 2,300,000 800,000 P4,900,000/12
P408,333
P2,640,00 0 1,440,000 1,000,000 P5,080,000/12
P423,333
Income Summary Bernabe, Capital Burgos, Capital
700,000 267,567 432,433 Bernabe P 100,000 40,833 126,734 P 267,567
Burgos P 200,000 42,333 190,100 P 432,433
Income Summary Bernabe, Capital Burgos, Capital Salaries Interest on beg. cap
Total P 64,000 636,000 P700 000 700,000
Burgos: Jan. 1 – June 30
Salaries Interest on average. cap Balance – 40%, 60% Net Profit 5.
Burgos 35,200 159,000 P 194,200 P
Income Summary Bernabe, Capital Burgos, Capital Salaries Interest on average. cap Balance – 3:1 Net Profit
4.
Bernabe P 28,800 477,000 P 505,800
Income Summary Bernabe, Capital Burgos, Capital Salaries Interest on end capital Balance – Equally Net Profit
3.
page 12
Total P300,000 83,166 316,834 P700 000 700,000 329,360 370,640
Bernabe P 100,000 28,800
Burgos P 100,000 35,200
Total P220,000 64,000
AA 1 - Chapter 1 (2008 edition)
page 13
Bonus Balance – 2:3 Net Profit B = 10%(NI –S – I)
43,600 156,960 P 329,360
235,440 P 370,640
43,600 392,400 P700 000
Problem 1 – 7 1.
2.
Sandy P 16,800
6% interest on capital Salaries Balance – 5:3:2 Net Profit
( 74,500) P(57,700)
6% interest on capital Salaries Balance – 5:3:2 Net Profit
P 16,800 ( 32,000) P( 15,200)
Tammy P 12,000 48,000 ( 44,700) P 15,300
Manny P 7,200 40,000 ( 29,800) P 17,400
Total P 36,000 88,000 (149,000) P(25,000)
P 12,000 48,000 ( 19,200) P 40,800
P
7,200 40,000 ( 12,800) P 34,400
P 36,000 88,000 ( 64,000) P 60,000
P
P 36,000 88,000 13,500 ...