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Solution Manual in Partnership and Corporation 2014-2015 1Partnership and CorporationSolution Manual2014-Chapter 1 Review of the Accounting Process**** Quizzers – Problems ****I. B – 25,000 B – 100,II. Maria Julieta Lopez Allera-AlegradoAssets = Liabilities + Capital Accrued Accounts Accrued Alegado...

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Partnership and Corporation Solution Manual 2014-2015 Chapter 1 Review of the Accounting Process ** Quizzers – Problems ** I.

B – 25,000

B – 100,000

II.

Maria Julieta Lopez Allera-Alegrado Assets

Beg. Bal. AJE #1

Cash 150,000 5,000

Liabilities = + Accrued Accounts Accrued Alegado Income = Payable Expense + Capital 48,000 = + 100,000

A/R 80,000 (5,000)

(6,000) (3,000) 8,000 8,000

72,000

A-

VII.

15,000

57,000

100,000 +

P. Amandoron Company 350,000 1,200,000 125,000 575,000

1,550,000 700,000 850,000

-D

Ruben Realty Co. 36,000 12

=

P3,000 x 5

=

P15,000 - A

36,000 12

=

P3,000 x 7

=

P21,000 - B

Evelyn T. Alegre Cash in Bank Office Equipment Office Furniture

VI.

42,000 =

229,000

Current Assets Property and Equipment Less: Current Liabilities Long Term Liabilities Owner’s Equity

V.

Assets = 850,000 + 30,000 300,000 60,000 = 1,240,000 =

Liability

+

Owner’s Equity 1,150,000 + 30,000

60,000 60,000

+

1,180,000 - D

Raul Langbid Co. truck

–

P18,000 12

= P1,500 x 3 = P4,500

building

–

P15,000 12

= P1,250 x 3 = 3,750 P 8,250 -A

Blas Sardido Co. Sales (250,000 x P 15) Cost of Sales: Beg. Inventory Purchases (400,000 x P11) Available for Sale Less: Ending Inventory (150,000 x P11) Gross Profit

3,750,000 4,400,000 4,400,000 1,650,000

VIII. Alfredo Yao Co. ERRATUM: Available for Sale P26,000 instead of P6,000 Beg. Inventory Purchases Freight In Available for Sale Ending Inventory

Expenses (40,000)

(3,000) (15,000)

15,000 149,000

IV.

Revenue 122,000

(6,000)

#2 #3

III.

Capital

15,000 10,000 1,000 26,000 5,000

-D

-D

2,750,000 1,000,000

- none of the choices

8,000 130,000 172,000

(58,000)

Solution Manual in Partnership and Corporation 2014-2015

1

Cost of Sales

21,000

Solution Manual in Partnership and Corporation 2014-2015

2

IX.

Rolando Ibañez Enterprises Accounts Payable P35,000 BB 25,000 20,000 On acct. 30,000 - A

Payment

X.

BB Billing

Accounts Receivable 350,000 5,000 Write-of 100,000 145,000 - A 300,000

Vicente Chotangco, Jr. BB

XI.

E. Detoya & Sons BB

XII.

Accounts Receivable 50,000 36,000 60,000 4,000 - A 110,000 40,000 70,000

Accounts Receivable 100,000 2,000 67,000 100,000 69,000 31,000 80,000 Sales 49,000 Account Sales 90,000 Cash Sales 139,000 - B

L. Caminade Enterprises Accounts Payable 20,000 70,000 BB 50,000 Account Purchases 80,000 Cash Purchases 130,000 Total Purchases - B

XIII. Laureano Cacho Trading 1,240,000 – 100,000 = 1,140,000 = 228,000 5 years 5 Cost of Machine Less: Acc. Dep’n. Net Book Value Sold at Loss on disposal XIV.

Santos Advertising Agency

Gomezano SM Marketing Yu and Sons

XV.

P1,240,000 228,000 P1,012,000 960,000 (P 52,000) - A

1 – 30 days 10,000 15,000 35,000 60,000 x 5% 3,000

31 – 60 days 20,000 30,000 45,000 95,000 x 8% 7,600

61 days and over 20,000 5,000 25,000 x 10% 2,500 = 13,100 – 8,000 = 5,100 - A

Leopoldo Medina Trading

250 units x P31 = P7,750 65 x 33 = 2,145 FIFO P9,895 - C

P27,605 ÷ 835 x 315 = P10,413.86 Average 9,895.00 P 518.86 bigger - B

XVI. Lucky Strike Co. Beg. Inventory Purchases Freight In Purchase Ret. & Allow. Available for Sale Cost of Goods Sold: Sales P4,500,000 Less: Gross Profit (40%) 1,800,000 Estimated Inventory, end Less: Actual Inventory after fire Damaged by fire

Solution Manual in Partnership and Corporation 2014-2015

P 3,450,000 2,740,000 20,000 ( 25,000) P 6,185,000

2,700,000 P3,485,000 - A 2,948,000 P 537,000 - C

2

XVII. Universal Financing Co. Principal

P50,000 x 15% 90 days = P 1,875 360 50,000 P 51,875 MV -C

P 1,875 ÷ 3 x 2 = P1,250 - A Interest Expense Accrued Interest Expense

1,250 1,250

** Quizzers ** Test III Manufacturing

Dr. 1) 2) 3) 4) 5) 6) 7) 8) 9) 10) 11) 12) 13) 14) 15) 16) 17) 18) 19) 20)

Finished Goods, Beg. Finished Goods, End Goods in Process, Beg. Goods in Process, End Raw Materials, Beg. Raw Materials, End Factory Supplies Inventory Factory Supplies Used Salaries - Office Salaries - Factory Repair - Office Equipment Repairs - Factory Equipment Light and Water - Office Light and Water - Factory Tools Used Patents Amortization of Patents Purchases, Raw Materials Freight In Sales

Income Statement

Cr.

Dr.

√

√

√

√ √

√ √ √ √ √ √ √ √ √ √ √ √ √

P 120,000 110,000 5,000 P 235,000 105,000 P 130,000 (B)

2.

Direct Materials Direct Labor Prime Cost

P 130,000 308,000 P 438,000 (A)

3.

Manufacturing Overhead: Indirect Labor Indirect Materials Amortization of Trademark Real Expense - Factory Depreciation - Factory Factory Overhead

6.

Factory Cost: Direct Materials Direct Labor Manufacturing Overhead Cost of Goods Manufactured: Direct Materials Direct Labor

√

√

Raw Materials, Beg. Purchases, Raw Materials Freight In Available for Sale Less: Raw Materials, End Direct Materials

5.

√ √

1.

Conversion Cost: Direct Labor Manufacturing Overhead

Dr.

√

Test IV – Multiple Choice (Problem)

4.

Balance Sheet

Cr.

P 45,000 65,000 50,000 25,000 40,000 P 225,000 (A)

P 308,000 225,000 P 533,000 (A) P 130,000 308,000 225,000 P 663,000 (C) P 130,000 308,000

Cr.

Manufacturing Overhead Factory Cost Add: Work in Process, Beg. Total cost placed in process Less: Work in Process, End Cost of Goods Manufactured 7.

225,000 P 663,000 250,000 P 913,000 275,000 P 638,000 (A)

Cost of Goods Manufactured Finished Goods, Inventory Goods Available for Sale Less: Finished Goods, End Cost of Goods Manufactured and sold

P 638,000 170,000 P 808,000 290,000 P 518,000 (A)

Chapter 2 Partnership – Nature and Information ** Exercises/Problems ** 2-1.

Sanada and Estrebilla Requirement 1:

Cash Merchandise Inventory Sañada, Capital

250,000 160,000

Cash Delivery Car Estrebilla, Capital

380,000 950,000

410,000

1,330,000

Requirement 2: Current Assets: Cash Merchandise

Partners’ Equity P 630,000 160,000

Non-Current Assets: Delivery Equipment Total Assets 2-2.

P 790,000

Sañada, Capital Estrebilla, Capital

P 410,000 1,330,000

950,000 P1,740,000

P1,740,000

Maula, Montecina and Maceda Requirement 1a:

Cash Furniture and Fixtures Transportation Equipment Accounts Payable Maula, Capital Montecina, Capital

P200,000 120,000 850,000 P 100,000 270,000 800,000

Jeremy Maceda was admitted in the partnership as an industrial partner with a 15% share in profit. Requirement 1b:

Cash Furniture and Fixtures Transportation Equipment Maula, Capital Montecina, Capital

P200,000 120,000 850,000 270,000 900,000

** (Same notation for Maceda) Requirement 2: Assets Current Assets Cash Non-Current Assets Furniture & Fixtures 120,000 Transportation Equipment 850,000

Total Assets

Current Liabilities Accounts Payable

100,000

200,000

970,00

1,170,000

Partners’ Equity Maula, Capital Montecina, Capital Maceda, Capital Total Partners’ Equity Total Liability & Partners’ Equity

270,000 800,000 1,070,000 1,170,000

2-3.

Malquisto and Rocabo Requirement 1:

Debits: Cash Accounts Receivable Merchandise Equipment

P 375,000 90,000 420,000 250,000

Credits: Estimated Uncollectible Accumulated Depreciation Accounts Payable Account balance of Malquisto Requirement 2:

P 1,000 50,000 75,000

a) Malquisto, Capital Estimated Uncollectible Account

126,00 P1,009,000 4,000 4,000

b) Malquisto, Capital Merchandise

30,000

c) Malquisto, Capital Accumulated Depreciation

20,000

30,000

d) Malquisto, Capital Accrued Utilities Requirement 3:

P1,135,000

20,000 1,500 1,500

Est. Uncollectible Accounts Accumulated Depreciation Accounts Payable Accrued Utilities Expense Malquisto, Capital Cash Accounts Receivable Merchandise Equipment

5,000 70,000 75,000 1,500 953500 375,000 90,000 390,000 250,000

Requirement 4: Malquisto and Rocabo Statement of Financial Position As of Assets Current Assets: Cash Accounts Receivable 90,000 Est. Uncollectible Account 5,000 Merchandise Non-Current Assets: Equipment (Net) Total Assets

851,750 85,000 390,000 180,000 1,506,750

Liabilities Accounts Payable 75,000 Accrued Utilities Expense 1,500

76,500

P artners’ Equity 953,500 476,750

1,430,750

Malquisto, capital Rocabo, Capital

Total Liabilities & Owner’s Equity

1,506,750

(the account Accumulated Depreciation is no longer carried in the book of the partnership)

2-4.

Malquisto, Beringuel and Alemanza

Requirement 1: Adjusting entries in their respective Sole Proprietorship Book Malquisto 1) Malquisto, Capital 4,000 Est. Uncoll. Acct. 2) Malquisto, Capital Merchandise

42,000

3) Malquisto, Capital Acc. Dep’n.

5,000

4) Cash 50,000 Malquisto, Capital

4,000

Beringuel Est. Uncoll. Acct. 500 Beringuel, Capital Beringuel, Capital Merchandise

60,000

42,000

Beringuel, Capital Acc. Dep’n.

100,000

5,000

50,000

Cash 150,000 Beringuel, Capital

500

Alemanza Alemanza, Capital 1,500 Est. Uncoll. Acct. Alemanza, Capital Merchandise

45,000

60,000

Alemanza, Capital Acc. Dep’n.

5,000

100,000

150,000

Cash 250,000 Alemanza, Capital

1,500

45,000

5,000

250,000

Requirement 2:

Closing Entries in their respective sole proprietorship book.

Malquisto Est. Uncoll. Acct. 7,000 Acc. Dep’n. 185,000 Malquisto, Capital 1,556,000 Cash A/R Merchandise Equipment

Requirement 3:

950,000 70,00 378,000 350,000

Beringuel Est. Uncoll. Acct. 4,500 Acc. Dep’n. 330,000 Beringuel, Capital 1,625,500 Cash A/R Merchandise Equipment

850,000 90,000 540,000 480,000

Alemanza Est. Uncoll. Acct. 3,500 Acc. Dep’n. 180,000 Alemanza, Capital 1,246,500 Cash 750,000 A/R 25,000 Merchandise 405,000 Equipment 250,000

Compound Opening Journal Entry

Cash Accounts Receivable Merchandise Equipment Estimated Uncollectible Account Malquisto, Capital Beringuel, Capital Alemanza, Capital

3,000,000 185,000 1,323,000 358,000 15,000 1,606,000 1,775,500 1,496,500

(Accumulated Depreciation-Equipment is no longer shown in the opening-entry)

2-5.

Laureto and Auditor Partnership

Assumption 1

Requirement 1: Journal Entries to close their Respective Sole Proprietorships’ Book Laureto Accounts Payable Notes Payable Interest Payable Allow. for Doubtful Accounts Accumulated Depreciation Laureto, Capital Cash Accounts Receivable Notes Receivable Interest Receivable Merchandise Equipment

Requirement 2:

50,000 20,000 500 10,000 15,000 275,500 125,000 80,000 50,000 1,000 75,000 40,000

Auditor Accounts Payable Allow. for Doubtful Accounts Acc. Dep’n. – Equipment Auditor, Capital Cash Accounts Receivable Merchandise Equipment

75,000 12,000 40,000 389,000 186,000 120,000 150,000 60,000

Journal Entries to record investment in the Partnership Book

Laureto Cash Accounts Receivable Notes Receivable Interest Receivable Merchandise Equipment Allowance for Doubtful Accounts Accounts Payable Notes Payable Interest Payable Laureto, Capital

Auditor Cash 186,000 Accounts Receivable 120,000 Merchandise 150,000 Equipment 20,000 Accounts Payable Allowance for Doubtful Accounts Auditor, Capital

75,000 12,000 389,000

6,000

Book ofAuditor Auditor, Capital 12,000 Allowance for Doubtful Acct.

12,000

Auditor, Capital Merchandise

7,500

3,750

Auditor, Capital Acc. Dep’n. Equipment

8,000

125,000 80,000 50,000 1,000 75,000 25,000 10,000 50,000 20,000 500 275,000

Assumption 2 Requirement 1: Book of Laureto Laureto, Capital Allowance for Doubtful Acct. Laureto, Capital Merchandise Laureto, Capital Acc. Dep’n. Equipment

Adjusting Entries 6,000

3,750

17,000 17,000

7,500

8,000

Closing Entries in their Respective Sole Proprietorship Book Book of Laureto Allowance for Doubtful Acct. Acc. Dep’n. Equipment Accounts Payable Notes Payable Interest Payable Laureto, Capital Cash Accounts Receivable Notes Receivable Interest Receivable Merchandise Equipment

Requirement 2:

125,000 80,000 50,000 1,000 71,250 8,000 16,000 50,000 20,000 500 248,750

Auditor Cash Accounts Receivable Merchandise Equipment Allowance for Doubtful Accts. Accounts Payable Auditor, Capital

Mendez and Salazar ERRATUM: P300,000 cost of building was Salazar’s investment

Requirement 1a:

Requirement 1b:

2-7.

125,000 80,000 50,000 1,000 71,250 40,000

Book of Auditor Allowance for Doubtful Acct. 24,000 Acc. Dep’n. Equipment 48,000 Accounts Payable 75,000 Auditor, Capital 361,500 Cash Accounts Receivable Merchandise Equipment

186,000 120,000 142,500 60,000

Journal Entries to record investment in the Partnership Book

Laureto Cash Accounts Receivable Notes Receivable Interest Receivable Merchandise Equipment Allowance for Doubtful Accts. Accounts Payable Notes Payable Interest Payable Laureto, Capital

2-6.

16,000 32,000 50,000 20,000 500 248,750

Cash Building Furniture Mendez, Capital Salazar, Capital

300,000 300,000 70,000

Cash Accounts Receivable Building Furniture Accounts Payable Mendez, Capital Salazar, Capital

300,000 30,000 300,000 70,000

140,000 530,000

20,000 170,000 510,000

Dabucol and Miranda Compound Journal Entry Cash 220,000 Computer 550,000 Furniture & Fixtures 200,000 Prepaid Rental 6,000 Dabucol, Capital Miranda, Capital Computations: Cash Computer Furniture & Fixtures Prepaid Rental

Dabucol 100,000 300,000 160,000 6,000 566,000

Miranda 120,000 250,000 40,000 410,000

Total 220,000 550,000 200,000 6,000 976,000

566,000 410,000

186,000 120,000 142,000 12,000 24,000 75,000 361,500

2-8.

Torralba and Rosada Requirement 1: Debits: Cash Accounts Receivable Merchandise Equipment

85,000 60,000 120,000 150,000

Credits: Allow. For Doubtful Accounts Acc. Depreciation Accounts Payable Torralba, Capital

4,000 30,000 80,000

415,000

114,000 301,000

Requirement 2: Allow. for Doubtful Accounts Torralba, Capital

3,000 3,000

Torralba, Capital Merchandise

15,000

Torralba, Capital Accumulated Depreciation

15,000

15,000 15,000

Accounts Payable Torralba, Capital

4,000 4,000

Requirement 3: Allow. for Doubtful Accounts Accumulated Depreciation Accounts Payable Torralba, Capital Cash Accounts Receivable Merchandise Equipment

1,000 45,000 76,000 278,000 85,000 60,000 105,000 150,000

Requirement 4: Cash (85,000+1/2 of P278,000) Accounts Receivable Merchandise Equipment Allow. for Doubtful Accounts Accounts Payable Torralba, Capital Rosada, Capital (1/2 of P278,000)

224,000 60,000 105,000 105,000 1,000 76,000 278,000 139,000

Requirement 5: Torralba and Rosada Partnership Statement of Financial Position As of Assets Cash Accounts Receivable Less: Allow. For Doubtful Accounts

Liabilities 60,000 1,000

Merchandise

Current Assets Non-Current Assets: Equipment Total Assets 2-9.

224,000

Accounts Payable

59,000 105,000 338,000

Torralba, Capital Rosada, Capital

105,000 493,00

76,000

Partners’ Equity 278,000 139,000

417,000

Total Liability & Partners’ Equity

493,000

Galbog and Torrequemada Requirement 1: Glabog, Capital Estimated Uncollectible Account

15,000

Glabog, Capital Merchandise

30,000

Glabog, Capital Accumulated Depreciation

20,000

Solution Manual in Partnership and Corporation 2014-2015

15,000 30,000 20,000

8

Requirement 2:

Journal Entries to close the books of Glabog Allow. for Doubtful Accounts Accumulated Depreciation Accounts Payable Glabog, Capital Cash Accounts Receivable Merchandise Equipment

15,000 20,000 60,000 670,000 320,000 75,000 220,000 150,000

Requirement 3: Assets Current Assets: Cash (P320,000 + P500,000) Accounts Receivable Allow. for Doubtful Accounts Merchandise Non-Current Asset: Equipment Total Assets

Liability

75,000 15,000

820,000

Accounts Payable

60,000 220,000

Partners’ Equity Glabog, Capital 670,000 Torrequemada, Capital 500,000 Total Liability & Partners’ Equity

130,000 1,230,000

60,000

1,170,000 1,230,000

2-10. Angie Aguilon Company Requirement 1:

Capital Contribution of Zulueta Unadjusted capital of Aguilon Accounts Receivable to be derecognized Recognized prepaid expenses Revaluation of Equipment Adjusted Aguilon Capital

267,000 ( 25,000 ) 13,000 25,000 280,000

Capital contribution of Zulueta is equal to P280,000,Matching the adjusted capital of Aguilon. Requirement 2: Angie Aguilon Company Statement of Financial Position As of June 30 _ Assets Cash Merchandise Prepaid Expense Non-Current Asset: Equipment Acc. Depreciation Total Assets

Liability 35,000 185,000 13,000 120,000 10,000

Accounts Payable Accrued Expenses Total Liabilities

45,000 18,000 63,000

233,000

110,000 3...