ParCor Baysa Chapter 3 PDF

Preview

Summary

CHAPTER 3 Partnership Operations E 1. Borres Buendia Bustos 2. x x x Borres Buendia Bustos 3 6 x 1 6 x 2 6 x E Income Summary Banal, Capital Benson, Capital Interest on average capital Remainder divided equally Total 112,250 137,750 Banal P 23,250 P112,250 Computation of average capital Banal x 3 x ...

Description

CHAPTER 3 Partnership Operations E 3-1 1. Borres Buendia Bustos 2.

= 250/500 x P600,000 = P300,000 = 150/500 x P600,000 = P180,000 = 100/500 x P600,000 = P120,000

Borres Buendia Bustos

= 3 / 6 x P600,000 = P300,000 = 1 / 6 x P600,000 = P100,000 = 2 / 6 x P600,000 = P200,000

E 3-2 Income Summary Banal, Capital Benson, Capital

250,000 112,250 137,750

10% Interest on average capital Remainder – divided equally Total Computation of average capital Banal 1/01 - 3/31 4/01 - 8/31 9/01 – 10/31 11/01 – 12/31

Benson

Banal P 89,000 23,250 P112,250

P800,000 960,000 840,000 900,000

x x x x

3 5 2 2

1/01 - 2/28 P1,200,000 x 2 3/01 - 6/30 1,020,000 x 4 7/01 - 9/30 1,160,000 x 3 10/01 – 12/31 1,260,000 x 3

Benson P114,500 23,250 P137,750

Total P203,500 47,500 P250,000

P 2,400,000 4,800,000 1,680,000 1,800,000 P10,680,000 / 12

P890,000

P 2,400,000 4,080,000 3,480,000 3,780,000 P13,740,000 / 12

P1,145,000

E 3-3 a.

b.

Interest of 10% on excess average capital Salaries Remainder – divided in the ratio of 70:30 Total

Benito P 40,000 300,000 112,000 P452,000

Interest of 10% on excess average capital Salaries Remainder –divided in the ratio of 70:30 Total

P 40,000 300,000 ( 98,000) P242,000

Bunye P200,000 48,000 P248,000

Total P 40,000 500,000 160,000 P 700,000

P200,000 ( 42,000) P158,000

P 40,000 500,000 ( 140,000) P 400,000

E 3-4 1. Blanco = 120/300 x P120,000 = P48,000; Banda = 180/300 x P120,000 = P72,000 2.

Blanco = 120/300 x P120,000 = P48,000; Banda = 180/300 x P120,000 = P72,000

3. Interest of 8% on original investment Balance – divided equally Total

Blanco P 9,600 48,000 P57,600

Banda P14,400 48,000 P62,400

Total P 24,000 96,000 P120,000

Salaries to partners Balance – divided equally Total

Blanco P 54,000 10,500 P 64,500

Banda P 45,000 10,500 P 55,500

Total P 99,000 21,000 P120,000

4.

5.

Blanco = 50/125 x P120,000 = P48,000; Banda = 75/125 x P120,000 = P72,000

E 3-5 1. Interest of 8% on beginning capital Salaries to partners Balance – divided 3:2 Total 2.

Bueno P 48,000 225,000 (40,200) P232,800

Beran P 54,000 115,000 (26,800) P142,200

Total P102,000 340,000 (67,000) P375,000

Beran = P375,000 x 2/5 = P150,000; however, minimum guaranteed amount to Beran is P175,000 Bueno = P375,000 – P175,000 = P200,000

E 3-6 Net income after salaries, interest and bonus Interest (P200,000 x 10%) Salaries (8,000 x 12) Net income before interest and salaries Bonus rate Amount of bonus to be credited to Basco

P322,000 P20,000 96,000

E 3-7 Income before income tax = P650,000 / 70% = P928,571 1.

B = .05 x P928,571 = P46,428

2.

B

= = =

.05 (P928,571 – B) P46,428 / 1.05 P44,217

3.

B T B

= = = = =

.05 (P928,571 – T) .30 (P928,571) = P278,571 .05 (P928,571 – P278,571) .05 (P650,000) P32,500

4.

B T B

= = = = = =

.05 (P928,571 – B – T) .30 (P928,571) = P278,571 .05 (P928,571 – B – P278,571) .05 (P650,000 – B) P32,500 / 1.05 P30,952

116,000 P438,000 x 25% P109,500

E 3-8 1. Capital balances Required capital Cash received (paid)

Balbin P240,000 256,000 (P 16,000)

Bagtas P200,000 224,000 (P 24,000)

Banta, Capital Balbin, Capital Bagtas, Capital

Banta P200,000 160,000 P 40,000

Total P 640,000 640,000 ----

40,000 16,000 24,000

2.

Balbin P240,000 320,000 P 80,000

Capital balances Required capital Additional investment

Bagtas P200,000 280,000 P 80,000

Banta P200,000 200,000 --------

Total P 640,000 800,000 P 160,000

P240,000 / 40% = P600,000; P200,000 / 35% = P571,428; P200,000 / 25% = P800,000 Cash

160,000 Balbin, Capital Bagtas, Capital

3. Capital balances Required capital Additional investment(withdrawals)

80,000 80 000 Balbin P240,000 240,000 --------

Bagtas P200,000 210,000 10,000

Banta, Capital Bagtas, Capital Cash E 3-9 Drawings charged against capital Less Additional investment Decrease in capital Less Net decrease in capital Share in net income Profit share Net income of the partnership

Total P640,000 600,000 P 40,000

50,000 10,000 40,000

P520,000 100,000 P420,000 240,000 P 180,000  25% P720,000

P 3-1 1. Income Summary Bondoc, Capital Barba, Capital Bondoc = P300,000 x 60% = P180,000 Barba = P300,000 x 40% = P120,000 2.

Banta P200,000 150,000 (P50,000)

Income Summary Bondoc, Capital Barba, Capital Bondoc = P300,000 x 210/360 = P175,000 Barba = P300,000 x 150/360 = P125,000

300,000 180,000 120,000

300,000 175,000 125,000

3.

Income Summary Bondoc, Capital Berba, Capital Bondoc = P300,000 x 255,000/382,500* = P200,000 Barba = P300,000 x 127,500/382,500** = P100,000 * Jan. 1 – Apr. 30 May 1 – Sept. 30 Oct. 1 - Dec. 31

**Jan. 1 – Mar. 31 Apr. 1 – Dec. 31

4.

P210,000 x 4 = 300,000 x 5 = 240,000 x 3 =

P150,000 x 3 = 120,000 x 9 =

P 840,000 1,500,000 720,000 P3,060,000 / 12 P 450,000 1,080,000 P1,530,000 / 12

P255,000

127,500 P382,500 300,000 155,100 144,900

Bondoc P 20,400 134,700 P155,100

Barba P 10,200 134,700 P144,900

Total P 30,600 269,400 P300,000

Income Summary Bondoc, Capital Barba, Capital Salaries Bal. – ending cap. ratio

6.

200,000 100,000

Income Summary Bondoc, Capital Barba, Capital 8% interest on ave. cap. Balance – equally

5.

300,000

300,000 188,000 112,000 Bondoc P 60,000 128,000 P188,000

Barba P 48,000 64,000 P112,000

Total P108,000 192,000 P300,000

Income Summary Bondoc, Capital Barba, Capital

300,000 225,000 75,000

Bondoc Barba P 75,000 P150,000 75,000 P225,000 P 75,000 Bonus P300,000 x 1/3 divided by 1 1/3 = P75,000 Bonus Bal. – ave. capital ratio

Total P 75,000 225,000 P300,000

P 3-2 1. Income Summary Bernal, Capital Burgos, Capital 8% int. on beg. capital Balance – 3: 1

350,000 243,300 106,700 Bernal P 28,800 214,500 P243,300

Burgos P 35,200 71,500 P106,700

Total P 64,000 286,000 P350,000

2.

Income Summary Bernal, Capital Burgos, Capital

350,000 139,000 211,000

Salaries 12% int. on ending capital Balance – equally

3.

* Jan. 1 – May 31 June 1 – Oct. 31 Nov. 1 – Dec. 31

Jan. 1 – June 30 July 1 – Oct. 31 Nov. 1 – Dec. 31

Total P200,000 108,000 42,000 P350,000 350,000 184,150 165,850

Bernal P 45,000 49,000 90,150 P184,150

P360,000 x 5 = 460,000 x 5 = 400,000 x 2 =

P440,000 x 6 = 360,000 x 4 = 500,000 x 2 =

Burgos P 85,000 50,800 30,050 P165,850

Total P130,000 99,800 120,200 P350,000

P1,800,000 2,300,000 800,000 P7,900,000 / 12

P408,333

P 2,640,000 1,4400,000 1,000,000 P5,080,000 / 12

P423,333

Income Summary Bernal, Capital Burgos, Capital Salaries 10% int. on ave. capital Balance – 40%, 60%

5.

Burgos P130,000 60,000 21,000 P211,000

Income Summary Bernal, Capital Burgos, Capital Salaries 12% int. on ave. cap.* Balance – 3:1

4.

Bernal P 70,000 48,000 21,000 P139,000

350,000 137,567 212,433 Bernal P 50,000 40,833 46,734 P137,567

Burgos P100,000 42,333 70,100 P212,433

Total P150,000 83,166 116,834 P350,000

Income Summary Bernal, Capital Burgos, Capital Salaries 8% int. on beg. capital Bonus -.10 (NI – S – I ) Balance – 2:3

350,000 164,360 185,640 Bernal P50,000 28,800 18,600 66,960 P164,360

Burgos P50,000 35,200 100,440 P185,640

Total P100,000 64,000 18,600 167,400 P350,000

P 3-3 1.

Bilbao P 33,600

6% interest on capital Salaries Balance – 5:3:2 Total

2.

(149,000) P(115,400)

6% interest on capital Salaries Balance – 5:3:2 Total

3.

P 33,600 ( 64,000) P( 30,400)

6% interest on capital Salaries Bonus Balance – 5:3:2 Total

P 33,600 112,500 P 146,100

Bertol P 24,000 96,000 ( 89,400) P 30,600

Borja P 14,400 80,000 ( 59,600) P 34,800

Total P 72,000 176,000 (298,000) P(50,000)

P 24,000 96,000 ( 38,400) P 81,600

P ,14400 80,000 ( 25,600) P 68,800

P 72,000 176,000 (128,000) P120,000

P 24,000 96,000 27,000 67,500 P214,500

P 14,400 80,000

P 72,000 176,000 27,000 225,000 P500,000

45,000 P 139,400

P 3-4 1. Salaries Bonus Interest Balance Total

Basa P400,000 60,000 100,000 269,000 P829,000

Benito P200,000 40,000 90,000 269,000 P599,000

Beltran

Bagnes

P 40,000 269,000 P309,000

P 94,000 269,000 P363,000

Total P 600,000 100,000* 324,000 1,076,000 P2,100,000

*B = 5% (P2,100,000 – B) = P100,000 x 3/5 = P60,000 x 2/5 = 40,000

2. Salaries Interest Balance Total

Basa P 400,000 100,000 (431,000) P 69,000

Benito P 200,000 90,000 (431,000) P(141,000)

Interest Bonus Salaries Total

Basa P 100,000 22,857 291,937 P 414,794

Benito P 90,000 15,238 145,968 P 251,206

3.

Beltran

Bagnes

40,000 (431,000) P (391,000)

P 94,000 (431,000) (P337,000)

P

Beltran P 40,000

Bagnes P 94,000

P 40,000

P 94,000

B = 5% (P800,000 – B) = P38,095 x 3/5 = P22,857; P38,095 x 2/5 = P15,238 *P437,905 x 4/6 = P291,937; P437,905 x 2/6 = P145,968

Total P 600,000 324,000 (1,724,000) (P800,000)

Total P 324,000 38,095 437,905* P 800,000

P 3-5 1.

Balte P40,000 120,000 238,000 430,000 P828,000

8% interest on capital Salaries 20% bonus on net income Balance – capital ratio Total 2.

Bala P 24,000 80,000 258,000 P 362,000

Sales Cost of Goods Sold Operating Expenses Income Taxes Income Summary

4,800,000

Income Summary Balte, Capital Bala, Capital

1,190,000

Balte, Capital Bala, Capital Balte, Drawing Bala, Drawing

60,000 100,000

Total P 64,000 200,000 238,000 688,000 P1,190,000

2,100,000 1,000,000 510,000 1,190,000 828,000 362,000

60,000 100,000 Balte and Bala Partnership Statement of Changes in Partners’ Equity For the Year Ended December 31, 2014

Capital balances, January 1, 2014 Add Distribution of net income for 2014: Interests Salaries Bonus Balance - capital ratio Total share in net income

Balte P 500,000

Bala P300,000

Total P 800,000

P 40,000 120,000 238,000 430,000 P 828,000

P 24,000 80,000 258,000 P 362,000

P 64,000 200,000 238,000 688,000 P1,190,000

Total Less Drawings Capital balances, December 31, 2014

P1,328,000 60,000 P1,268,000

P 662,000 100,000 P 562,000

P1,990,000 160,000 P1,830,000

P 3-6 1. Net sales (P1,525,000 – P25,000) Cost of goods sold: Purchases Less Merchandise inventory, end Gross profit Operating expenses (300,000 – 12,500 – 5,000 + 17,500 + 30,000) Income before income tax Income tax Net income

P1,500,000 P980,000 305,000

675,000 P 825,000 330,000 P 495,000 148,500 P 346,500

2.

Brenda P100,000 24,650 138,656 P263,306

Brosas

Salaries (P150,000 x 8/12) Additional 10% of NI after salaries Balance – original capital Total

P83,194 P83,194

Total P100,000 24,650 221,850 P346,500

Beginning capital Add Share in net income Total Less Drawings Ending capital

Brenda P625,000 263,306 P888,306 100,000 P788,306

Brosas P375,000 83,194 P458,194 150,000 P308,194

Total P1,000,000 346,500 P1,346,500 250,000 P1,096,500

3.

P 3-7 Be on Top Company Income Statement For the Year Ended December 31, 2014 Sales Cost of goods sold: Purchases Less: Purchase returns and allowances Purchase discounts Cost of goods available for sale Less Merchandise inventory, December 31 Gross profit Other operating income – interest Selling expenses (schedule 1) Administrative and general expenses (schedule 2) Operating income Interest expense Net income before Income Tax Income Taxes Net Income after Income Tax

P5,100,000 P4,920,000 P 99,000 138,000

237,000 P4,683,000 1,406,000

3,277,000 P1,823,000 27,000 ( 530,300) ( 801,800) P 517,900 ( 30,000) P487,900 146,370 P 341,530

Division of net income: Bathan P 60,000 100,000 66,315 P226,3150

Interest Salaries Balance – divided equally Total Schedule 1 – Selling expenses Sales salaries Store supplies Depreciation Advertising

P480,000 19,500 21,300 9,500 P530,300

Buenas P 48,900 66,315 P115,215

Total P108,900 100,000 132,630 P341,530

Schedule 2 – General and administrative expenses Taxes P 36,500 Doubtful accounts 9,300 Others 756,000 Total P801,800

Be on Top Company Statement of Changes in Partners’ Equity For the Year Ended December 31, 2014 Bathan P600,000 226,315 P826,315 144,000 P682,315

Original capital Add Share in net income Total Less Drawing Capital, December 31, 2010

Buenas P489,000 115,215 P604,215 54,000 P550,215

Total P1,089,000 341,530 P1,430,530 198,000 P1,232,530

Be on Top Company Statement of Financial Position December 31, 2014 Assets Current assets: Cash Notes receivable Accounts receivable P186,000 Less Allowance for doubtful accounts 9,300 Interest receivable Merchandise inventory Prepaid taxes Store supplies Noncurrent assets Store furniture Less Accumulated depreciation Total assets Liabilities and Capital Current liabilities; Notes payable Accounts payable Advertising payable Taxes payable Interest payable Income tax payable Total liabilities Bathan, capital Buenas, capital Total partners’ capital Total liabilities and capital 3. Adjusting entries Adjustment for inventories is included in the closing entries a.

b.

P582,750 120,000 176,700 6,000 1,406,000 10,000 16,500 P222,000 21,300

P2,317,950

200,700 P2,518,650

P 360,000 756,000 9,500 10,500 3,750 146,370 P1,286,120 P 682,315 550,215 1,232,530 P2,518,650

Store Supplies Expense Store Supplies

19,500

Depreciation Expense Accumulated Depreciation

21,300

19,500

21,300

c.

d.

e.

f. g. h. i.

Advertising Expense Advertising Payable

9,500 9,500

Prepaid Taxes Taxes

10,000

Taxes Taxes Payable

10,500

10,000

10,500

Interest Expense Interest Payable

3,750

Interest Receivable Interest Revenue

6,000

Doubtful Accounts Expense Allowance for Doubtful Accounts

9,300

Income Tax Income Tax Payable

3,750 6,000 9,300 146,370 146,370

Closing entries a. Merchandise Inventory Interest Revenue Purchase Returns and Allowances Purchase Discounts Sales Income Summary

1,406,000 27,000 99,000 138,000 5,100,000

b.

6,428,470

c.

d.

Income Summary General Expenses – Others Interest Expense Purchases Sales Salaries Taxes Store Supplies Expense Depreciation Expense Advertising Expense Doubtful Accounts Expense Income Taxes

6,770,000 756,000 30,000 4,920,000 480,000 36,500 19,500 21,300 9,500 9,300 146,370

Income Summary Bathan, Capital Buenas, Capital

341,530

Bathan, Capital Buenas, Capital Bathan, Drawing Buenas, Drawing

144,000 54,000

226,3150 115,215

144,000 54,000

P 3-8 Bacani, Badeo and Barte Statement of Changes in Partners’ Equity For the Three Years Ending December 31, 2014

Original capital Less: Share in net loss – 2012 (sch. 1) Drawing Capital, January 1, 2013 Add Share in net income – 2013 (sch. 2) Total Less Drawing Capital, January 1, 2014 Add Share in net income – 2014 (sch. 3) Total Less Drawing Capital, December 31, 2014

Bacani P1,000,000 ( 8,000) (72,000) P 920,000 107,200 P1,027,200 139,600 P 887,600 170,855 P1,058,455 163,200 P 895,255

Badeo P500,000 ( 14,000) (86,800) P 399,200 99,952 P 499,152 163,200 P 335,952 153,656 P 489,608 195,200 P 294,408

Barte P 400,000 ( 20,000) ( 96,000) P 284,000 93,040 P 377,040 177,200 P 199,840 145,489 P 345,329 169,600 P 175,729

Total P1,900,000 ( 42,000) (254,800) P1,603,200 300,192 P1,903,392 480,000 P1,423,392 470,000 P1,893,392 528,000 P1,365,392

Bacani P 96,000 60,000 ( 164,000) P( 8,000)

Badeo P 120,000 30,000 ( 164,000) P( 14,000)

Barte P 120,000 24,000 ( 164,000) P(20,000)

Total P336,000 114,000 ( 492,000) P( 42,000)

Bacani P 96,000 55,200 ( 44,000) P 107,200

Badeo P 120,000 23,952 ( 44,000) P 99,952

Barte P 120,000 17,040 ( 44,000) P 93,040

Total P336,000 96,192 ( 132,000) P300,192

Barte P 120,000 11,990

Total P336,000 85,403 8,100 40,497 P470,000

Schedule 1 – Distribution of 2012 net loss Salaries Interest on beginning capital Balance – equally Total Schedule 2 – Distribution of 2013 net income Salaries Interest on beginning capital Balance – equally Total Schedule 3 – Distribution of 2014 net income Bacani Badeo Salaries P 96,000 P 120,000 Interest on beginning capital 53,256 20,157 Bonus 8,100 Balance – equally 13,499 13,499 Total P 170,855 P 153,656 Bonus = P470,000 – (P336,000 + P85,403) x 20/120 = P8,100

P 3-9 1.

Balmes = 5/10 x 80% = 40% Bamban = 3/10 x 80% = 24% Buela = 2/10 x 80% = 16% Bagnes 20%

13,499 P 145,489

2.

Corrected net income = P400,000 – ( P24,000 - P62,000 - P40,000 + P30,000 + P18,000 x 70%) = P379,000 Balmes Bamban

= P379,000 x 40% = P151,600 = P379,000 x 24% = P 90,960

Multiple Choice 1. C Jan. 1 – Mar. 31 Apr. 1 – May 31 June 1 – Aug. 31 Sept. 1 – Dec. 31

2.

P 80,000 x 3 96,000 x 2 112,000 x 3 72,000 x 4

B

= = = =

P 240,000 192,000 336,000 288,000 P1,056,000 / 12 = P88,000 Bañas P 120,000 (32,000) P88,000

Capital beg. Share in net loss

3.

Buela = P379,000 x 16% = P60,640 Bagnes = P379,000 x 20% = P75,800

A

Bernardo P 110,000 (12,000) P98,000

Salaries Balance – 60:40

4.

D

6.

B

C

Belo P 90,000 (8,000) P82,000 Bustos

Net Profit Bonu...