Chapter 12 FAR Millan PDF

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CHAPTER 12PROBLEM 11. FALSE2. FALSE3. FALSE4. TRUE5. TRUE6. TRUE7. FALSE8. FALSE9. FALSE10. TRUEPROBLEM 3:1. A.A B Total Amount being allocated 1,200, Allocation: Salaries 80,000 20,000 100, Bonus 110,000 110, Allocation of remaining profit (1-100k-110k) = 990, (990K x 70%); (990K x 30%) 693,000 297...

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CHAPTER 12 PROBLEM 1 1. 2. 3. 4. 5. 6. 7. 8. 9. 10.

FALSE FALSE FALSE TRUE TRUE TRUE FALSE FALSE FALSE TRUE

PROBLEM 3: 1. A. A Amount being allocated Allocation: 1. Salaries 2. Bonus 3. Allocation of remaining profit (1.2M-100k-110k) = 990,000 (990K x 70%); (990K x 30%) As Allocated

B

80,000 110,000

20,000

100,000 110,000

693,000 883,000

297,000 317,000

990,000 1,200,000

Profit before salaries Salaries Profit after salaries but before deduction of bonus Multiply: Bonus rate Bonus

1.B.

Total 1,200,000

1,200,000 100,000 1,100,000 0.1 110,0 00

Closing entry

Income Summary A, Capital B, Capital

1,200,000 883,000 317,000

2. A. A Amount being allocated Allocation: 1. Salaries 2. Bonus 3. Allocation of remaining profit (1.2M-100k-110k) = (160,000) (160K x 70%); (160K x 30%) As Allocated

B

Total 60,000

80,000

20,000

100,000 -

(112,000 ) (32,000)

( 48,000 ) (28,000)

(160,000 ) (60,000)

2. B. Closing entry

A, Capital B, Capital Income Summary

32,000 28,000 60,000

3. A. A Amount being allocated Allocation: 1. Salaries 2. Bonus 3. Interest on weighted ave. Capital 4. Allocation of remaining profit (1.2M - 120k - 108k - 70k) = 902,000 (902K x 70%); (902K x 30%) As Allocated

B

100,000 108,000

631,400 839,400

Total 1,200,000 20,000 70,000

120,000 108,000 70,000

270,600 360,600

902,000 1,200,000

Profit before salaries Salaries Profit after salaries but before deduction of bonus Multiply: Bonus rate Bonus

beg. Balance April 30 investment May 31 investment Aug. 1 withdrawal Dec. 1 investment weighted ave. Capital balance multiply: interest rate Interest on weighted ave. Capital

Closing entry

3. B. PROBLEM 4: 1. 2. 3. 4. 5. 6. 7. 8. 9. 10.

C B B A A C D A B A

Balances 400,000 300,000 200,000 (100,000) 300,000

Income Summary A, Capital B, Capital

1,200,000 120,000 1,080,000 0.1 108,000

Months outstanding/12 12/12 8/12 7/12 5/12 1/12

weighted average 400,000 200,000 116,667 (41,667) 25,000 700,000 0.1 70,000

1,200,000 839,400 360,600...