Eugene and Alfred are partners in their Ghost Fighting business. Alfred is the managing partner. As of December 2020, their capital account showed the following: Eugene Capital Dr. 1-Jul 45,000 Dr. 1-Dec 30,000 Cr. Jan. 1- 300,000 Cr. Nov. - 105,000 Cr. Apr. - 30,000 1-Jan Alfred Capital Dr. 1-Apr 90000 Cr. Jan - 450000 Dr. 1-Dec - 105000 Cr. Jun - 150000 Cr. oct.- 195000 CASE I: Assuming the partnership earned a net profit of P360,000. CASE II: Assuming the partnership incurred a net loss of P68,000 Required: On your answer sheet (yellow pad), using the following agreements, distribute the profit and losses in Case I & II to Eugene & Alfred. Make a journal entry after your computation. 1) Equally 2) 2:4 ratio to Eugene and Alfred, respectively 3) 60% 40% ratio respectively

Eugene and Alfred are partners in their Ghost Fighting business. Alfred is the managing partner. As of December 2020, their capital account showed the following: Eugene Capital Dr. 1-Jul 45,000 Dr. 1-Dec 30,000 Cr. Jan. 1- 300,000 Cr. Nov. - 105,000 Cr. Apr. - 30,000 1-Jan Alfred Capital Dr. 1-Apr 90000 Cr. Jan - 450000 Dr. 1-Dec - 105000 Cr. Jun - 150000 Cr. oct.- 195000 CASE I: Assuming the partnership earned a net profit of P360,000. CASE II: Assuming the partnership incurred a net loss of P68,000 Required: On your answer sheet (yellow pad), using the following agreements, distribute the profit and losses in Case I & II to Eugene & Alfred. Make a journal entry after your computation. 1) Equally 2) 2:4 ratio to Eugene and Alfred, respectively 3) 60% 40% ratio respectively

SWFT Comprehensive Vol 2020

43rd Edition

ISBN:9780357391723

Author:Maloney

Publisher:Maloney

Chapter21: Partnerships

Section: Chapter Questions

Problem 34P

See similar textbooks

Similar questions

The information given below was extracted from the accounting records of Total Limited, a partnership business with Glen and Murry as partners. Information:Extract from the ledger of Total Limited on 30 June 2021 R Capital: Glen 400 000 Capital: Murry 300 000 Current a/c: Glen (01 July 2020) 45 000 CR Current a/c: Murry (01 July 2020) 42 000 DR Drawings: Glen 95 000 Drawings: Murry 110 000 The following must be taken into account:1. On 30 June 2021 the Profit and Loss account reflected a net profit of R940 000.2. Partners are entitled to interest at 14% p.a. on their capital balances.Note: Glen decreased his capital contribution by R90 000 on 01 July 2020.This capital decrease has been recorded.3. Partners are entitled to the following monthly salaries:• Glen R13 000 for the first ten months of the financial year and R15 000• for the next two months.• Murry R10 000 per month throughout the year.4. Partner Murry is entitled to a bonus equal to 10% of the…
The information given below was extracted from the accounting records of Total Limited, a partnership business with Glen and Murry as partners. Information: Extract from the ledger of Total Limited on 30 June 2021 R Capital : Glen 400 000 Capital: Murry 300 000 Current a/c: Glen (01 July 2020) 45 000 CR Current a/c: Murry (01 July 2020) 42 000 DR Drawings: Glen 95 000 Drawings: Murry 110 000 The following must be taken into account: On 30 June 2021 the Profit and Loss account reflected a net profit of R940 000. 1. 2. Partners are entitled to interest at 14% p.a. on their capital balances. Note: Glen decreased his capital contribution by R90 000 on 01 July 2020. This capital decrease has been recorded. 3. Partners are entitled to the following monthly salaries: • Glen R13 000 for the first ten months of the financial year and R15 000 • for the next two months. • Murry R10 000 per month throughout the year. Partner Murry is entitled to a bonus equal to 10% of the net profit before any of…
The information given below was extracted from the accounting records of Total Limited, a partnership business with Glen and Murry as partners. Information: Extract from the ledger of Total Limited on 30 June 2021 R Capital : Glen 400 000 Capital: Murry 300 000 Current a/c: Glen (01 July 2020) 45 000 CR Current a/c: Murry (01 July 2020) 42 000 DR Drawings: Glen 95 000 Drawings: Murry 110 000 The following must be taken into account: 1. On 30 June 2021 the Profit and Loss account reflected a net profit of R940 000. 2. Partners are entitled to interest at 14% p.a. on their capital balances. Note: Glen decreased his capital contribution by R90 000 on 01 July 2020. This capital decrease has been recorded. 3. Partners are entitled to the following monthly salaries: Glen R13 000 for the first ten months of the financial year and R15 000 for the next two months. • Murry R10 000 per month throughout the year. 4. Partner Murry is entitled to a bonus equal to 10% of the net profit before any of…
On December 31, 2020, the accounting records of the Friends Partnership included the following information: Raflyn, drawing (debit balance) P 120,000 Jane, drawing (debit balance) Pablo, loan Raflyn, capital Jane, capital Pablo, capital 45,000 150,000 615,000 502,500 540,000 Total assets amounted to P2,392,500, including P262,500 cash, and liabilities totaled P750,000. The partnership was liquidated on December 31, 2020, and Jane received P416,250 cash pursuant to the liquidation. Raflyn, Jane, and Pablo share net income and losses in a 5:3:2 ratio, respectively. Compute for the total loss on realization.
On June 30, 2021, William and Bryan formed a partnership. The partners agreed to invest equalamounts of capital. William invested his proprietorship’s assets and liabilities as follows: Book Value Fair Market ValueAccounts Receivable Php 720,000 Php 720,000Allowance for Doubtful Accounts - 0 - 100,500Merchandise Inventory 233,000 241,000Prepaid Expenses 117,000 117,000Office Equipment 459,000 276,000Accumulated Depreciation 153,000 - 0 -Accounts Payable 191,000…
Problem: Nadine and Lysa formed a partnership on Jan. 01, 2019. Below the details of their capital accounts for 2019: Nadine, Capital Lysa, Capital 1-Jul 200,000 500,000 1-Jan 300,000 300,000 31-Dec 150,000 450,000 On the same year, the partnership generated a profit of P200,000. Required: Determine the Profit Ratio and the share on profits for Nadine and Lysa on the following agreements: A. If agreement is based on Capital Contributions: Nadine Lysa 1 Profit Ratio 4 Share on Profit B. If agreement is based on Average Capital: Nadine Lysa 5 Profit Ratio Share on Profit 2. CO 3.
AA and BB are partners engaged in a manufacturing business. Transactions affecting the partners’ capital accounts in 2022 are as follows: AA BB Debit Credit Debit Credit Beg. Balance P250,000 P350,000 April 1 150,000 100,000 June 30 125,000 250,000 September 1 225,000 300,000 October 1 350,000 200,000 The income summary has a debit balance of P225,000. Agreement between AA and BB are as follows: Interest on average capital at 8%. Salaries of P125,000 and P175,000 are given to AA and BB, respectively. Bonus to BB at 25% of net income after deducting interest and salaries but before deducting bonus. Balance is to be divided equally. How much is the net increase (decrease) in BB’s capital account in 2022?
On January 1, 2020, Mr. Ann and Ms. Buoy agreed to form a partnership. The partnership contributions are as follows Mr. Ann Ms. Buoy Cash 50,000.00 120,000.00 Accounts receivable 360,000.00 1,080,000.00 Inventories 216,000.00 360,000.00 Land 1,080,000.00 Building 900,000.00 Equipment 90,000.00 90,000.00 Accounts Payable (336,000.00) (450,000.00) Capital P1,460,000.00 2,100,000.00 The partners agreed the following *The recovereable amount of the partners respective accounts receivable are P300,000 for Mr. Ann and P760,000 for Ms. Buoy *The inventory contributed by Ms. Buoy includes obselete items with recorded cost of P20,000.00 *The land has an attached mortgage of P180,000, which the partnership will assume *The equipment contributed by Ms. Buoy has a fair value of P130,000. *Mr. Ann has unrecorded accounts payable of P100,000. The partnership assumes the obligation How much is the initial capital of Ms. Buoy
The capital accounts of Scott and Tucker at the end of the fiscal year 2019 are as follows: Scott, Capital January 1 Balance P210,000 Мay 1 Investment 90,000 October 1 Withdrawal Р60,000 Tucker, Capital January 1 Balance P150,000 April 1 Withdrawal P30,000 The partnership profit for the year ended December 31, 2019 was P300,000. Instruction: Prepare schedule of profit allocation and journal entries to record transfer to profit to the capital accounts under each of the following independent assumptions: 1. Profit is divided 60% to Scott and 40% to Tucker. 2. Profit is divided into ratio of capital balances at the beginning of the period. 3. Profit is divided in the ratio of average capital balance. Interest of 8% is allowed on the average capital and the balance of profit is divided equally. 4. Salaries of P60,000 and P48,000 are allowed to Scott and Tucker, respectively, and the balance of the profit is divided in the ratio of capital balances at the end of the period. 5. 6. Scott is…
At the end of its first year of operations on December 31, 2019, CAP Company’s accounts show the following.Partner Drawing CapitalCharlies $15,000 $40,000Andrew 10,000 25,000Patrick 5,000 15,000The capital balance represents each partner’s initial capital investment. Therefore, net income or net loss for 2019 has not been closed to the partners’ capital accounts. (Find the attached image for better view) Instruction(a) Journalize the entry to record the division of net income for 2019 under each of the independent assumptions shown on the following:(1) Net income is $50,000. Income is shared 5:3:2.(2) Net income is $40,000. Charlies and Andrew are given salary allowances of $15,000 and $10,000, respectively. The remainder is shared equally.(3) Net income is $37,000. Each partner is allowed interest of 10% on beginning capital balances. Charlies is given an $20,000 salary allowance. The remainder is shared equally. (b) Prepare a schedule showing the division of net income under…
On February 28, 2023, the partners Anna, Juan. Berto authorized the liquidation of their partnership. The statement of financial position is as follows: AAA Statement of Financial Position February 28, 2023 Cash Non-cash assets Total Assets P10,000 Accounts Payable 290,000 Ana, Capital Required: a. Prepare the Cash Priority Program b. Prepare the journal entries for March 1, and March 4, 2023 P300,000 Juau, Capital Berto, Capital Total Liabilities and Capital P100,000 100,000 20,000 80,000 P300,000 Additional Informatic 1. The partner's profit and loss ratio were Amma, 40%; Juan, 40% and Berto 20% 2. On March 1, 2023, non-cash assets with a book value of P200,000 realized P150,000, and all available cash was paid to creditors and to partners. 3. On March 4, 2023. non-cash assets with a book value of P90,000 realized P70,000, and that amount was paid to partners.
Rodriguez and Ying started a partnership on July 1, 2019. Rodriguez contributes P4100 cash, furniture with a current market value of P47,000, outstanding accounts payable of P16,000 and computer equipment originally costing P48,000 with recorded accumulated depreciation of P28,000, but with a current market value of P18,000. a. Rodriguez, Capital will be credited for b. Total asset investment of Rodriguez amounts to