Huum - partnership and corp PDF

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WW and RR share profits and losses equally, WW and RR receive salary allowances of P20 000 and P30 000 respectively, and both partners receive 10% interest on their average capital balances. Average capital balances are calculated at the beginning of each month regardless of when the capital contrib...

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36. WW and RR share profits and losses equally, WW and RR receive salary allowances of P20 000 and P30 000 respectively, and both partners receive 10% interest on their average capital balances. Average capital balances are calculated at the beginning of each month regardless of when the capital contributions and capital withdrawals were made, and partners drawings are not used in determining the average capital balances. Total net income for 20x5 is P120 000. WW RR January 1 Capital Balances ……………………………..............P100 000 P120 000 Yearly Drawings (P1500 a month) ……………………………… 18 000 18 000 Permanent withdrawals of capital: June 3 ……………………………………………. (12 000) May 2 ……………………………………………. (15 000) Additional investments of capital: July 3 …………………………………………….. 40 000 October 2 ………………………………………… 50 000 What is the weighted average capital for WW and RR respectively for 20x5? Answer: A. P110 667 and P119 5853 37. HH, MM, and AA formed a partnership on January 1 20x5, and contributed P150 000, P200 000, and P250 000, respectively. Their articles of co-partnership provide that the operating income be shared among the partners as follows: as salary, P24 00 for HH, P18 000 for MM, and P12 000 for AA; interest of 12% on the average capital during 20x5 of the three partners: and the remainder in the ratio of 2:4:4 respectively. The operating income for the year ending December 31 20x5 amounted to P176 000. HH contributed additional capital of P30 000 on July 1 and made a drawing of P10 000 on October 1; MM contributed additional capital of P20 000 on August 1 and made a drawing of P10 000 on October1; AA made a drawing of P30 000 on November 1. The partners’ capital balances on December 20x5 are: Answer: D. HH, P223 180; MM, P272 060; AA, P280 760 38. Merlin, a partner in the Camelot Partnership, has a 30% participation in partnership profits and losses. Merlin’s capital account has a net decrease of P1 200 000 during the calendar year 20x5. During 20x5, Merlin withdrew P2 600 000 (charged against his capital account) and contributed property valued at P500 000 to the partnership. What was the net income of the Camelot Partnership for year 20x5? Answer: A. P3 000 000

39. On January 2 20x5, BB and PP formed a partnership. BB contributed capital of P175 000 and PP, P25 000. They agreed to share profits and losses 80% and 20%, respectively. PP is the general manager and works in the partnership full time and is given a salary of P5 000 a month; an interest of 5% of the beginning capital (of both partner) and a bonus of 15% of net income before the salary, interest and the bonus. The profit and loss statement of the partnership for the year ended December 31 20x5 is as follows: Net sales ……………………………………………………… …………………… P875 000 Cost of goods sold …………………………………………………………………. 700 000 Gross Profit ………………………………………………………………………… P175 000 Expenses (including the salary, interest and the bonus)…………………………… 143 000 Net income …………………………………………………………………………. P 32 000 The amount of bonus to PP in 20x5 amounted to: Answer: C. P18 000

40. On January 1 20x5, A, B, C, and D formed Bakya Trading Co., a partnership, with capital contributions as follows: A, P50 000; B, P25 000; C, P25 000; and D, P20 000. The partnership contract provided that each partner shall receive a 5% interest on contributed capital, and that A and B shall receive salaries of P5 000 and P3 000, respectively. The contract also provided that C shall receive a minimum of P2 500 per annum, and D a minimum of P6 000 per annum, which is inclusive of amounts representing interest and share of remaining profits. The balance of the profits shall be distributed to A, B, C, and D in a 3:3:2:2 ratio. What amount must be earned by the partnership, before any change for interest and salaries, so that A may receive an aggregate of P12 500 including interest, salary and share of profits? Answer: D. P32 333...