Partnership- Operations- Execise PDF

Preview

Summary

Honrada, Trisha Mae C.BSMA 1EPARTNERSHIP OPERATIONS PROBLEMC:AA and BB formed a partnership on April 1, 2021, with initial capital contributions amounting to P100, and P150,000, respectively. The partners agreed to the following stipulations in their partnership agreement:(1) Annual salaries allowed...

Description

Honrada, Trisha Mae C. BSMA 1E PARTNERSHIP OPERATIONS PROBLEM C: AA and BB formed a partnership on April 1, 2021, with initial capital contributions amounting to P100,000 and P150,000, respectively. The partners agreed to the following stipulations in their partnership agreement: (1) Annual salaries allowed to partners, P60,000 for AA and P36,000 for BB. (2) AA is entitled to a bonus of 15% of net income after salaries and bonus but before interest on capital investment. (3) Original partner's capital balance shall be allowed interest of 10%. (4) Remaining profits are to be allowed 40% to AA and 60% to BB. On December 31, 2021, the partnership reported net income of P210,000.

Requirements: 1. How much is the net income allocated to AA and BB, respectively? Total AA BB Salaries

45,000

27,000

72,000

Interest

10,000

15,000

25,000

Bonus

21,260.87

Remainder

36,695.65

55,043.48

112,956.52

97,043.48

21,260.87 91,739.13

2. Assuming that no stipulation was made as to the allocation of remaining profit after considering salaries, interests and bonus, how much is the net income allocated to AA and BB, respectively? Total AA BB Salaries

45,000

27,000

72,000

Interest

10,000

15,000

25,000

Bonus

21,260.87

Remainder Total

36,695.65 112,956.52

21,260.87 55,043.48 97,043.48

91,739.13 210,000

Ratio

.40

.60

= original capital contribution / total capital BB= 150,000/250,000 = .6 or 60% 3. Assuming that the bonus is based on net income after salaries and interest but before bonus, how much is the net income allocated to AA and BB, respectively? AA BB Total Sales

45,000

27,000

72,000

Interest

10,000

15,000

25,000

Bonus

19,941.18

Remainder

37,223.53 112,164.71

19,941.18 55,835.29 97,835.29

93,058.82

PROBLEM D: On January 1, 2021, AA and BB decided to form a partnership. At the end of the year, the partnership made net income of P120,000. The capital accounts of the partnership show the following transactions: AA, Capital Dr January 1 April 1 June 1 August 1 September 1

BB, Capital Cr 40,000

Dr

Cr 25,000

5,000 10,000 10,000 3,000

October 1

5,000

December 1

4,000

1,000 5,000

Requirements: 1. Assuming that an interest of 20% is given on the original capital and the balance of the profits is allocated equally, how much is the net income allocated to each partner? AA, CAPITAL

BB, CAPITAL

Total

54,000

36,000

90,000

Interest

10,800

7,200

18,000

Remainder

51,000

51,000

102,000

Net Income

61,800

₱

58,200

₱

120,000

2. Assuming that an interest of 20% is given on the original capital and the balance of the profits is allocated equally, how much is the ending capital of each partner? Beg. Capital Income

54,000 61,800

Ending Capital

115,800

36,000 58,200 94,200

3. Assuming that an interest of 20% is given on the average capital and the balance of the profits is allocated equally, how much is the net income allocated to each partner? AA, CAPITAL 42,000

₱ Interest Remainder

BB, CAPITAL ₱

Total

30,000

72,000

8,400

6,000

14,400

52,800

52,800

105,600

₱

61,200

₱

58,800

PROBLEM E: AA and BB are partners that had the following capital movements during 2021: AA BB January 1 capital balances ₱ 100,000 ₱ 120,000 Temporary drawings (P1,500 at the start of every month) 18,000 18,000 Permanent withdrawals Jun-01 12,000 May-01

15,000

Additional investments Jul-01

40,000

Oct-01

50,000

Note: Temporary drawings are deductions against the share in profit or loss Requirements: 1. How much is the weighted average capital for AA and BB? AA, CAPITAL Jan-01 100000 x 12/12 ₱ 7/12 7,000 May-01

100,000

₱

(15000) x 8/12

Jul-01

40000 x 6/12

Oct-01

50000 x 3/12

BB, CAPITAL 120,000 Jun-01 (7000) x -

10,000

20,000

₱

113,000

12,500 ₱ 122,500...