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CHAPTER-2 Advance Accounting Solman
CHAPTER-2 Advance Accounting Solman
CHAPTER-2 Advance Accounting Solman
CHAPTER 2
MULTIPLE CHOICE ANSWERS AND SOLUTIONS
2-1:
d
Jordan
P120,000
Pippen
P80,000
( 10,000)
( 10,000)
P110,000
P 70,000
JJ
P18,000
KK
LL
P15,000
P 30,000
)
)
P45,000)
( 6,000)
( 6,000)
( 6,000)
P27,000
P 24,000
P39,000
Allan
Michael
Annual salary
P200,000
Balance, equally
( 20,000)
Total
P180,000
2-2:
2-3:
2-4:
a
Interest
Allan - .10 X (P40,000 + 60,000 /2)
Michael - .10 X (P60,000 + 70,000/2)
P 11,500
Balance, equally
__28,000
Total
P 5,000
)
P 6,500)
_14,000
_14,000
P 19,000
P20,500
Greg
P 6,000
Henry
P 4,000
,000
2-5:
a
Interest (.10 of average capital)
P 22,000
Salaries
50,000
Balance, equally
(105,000)
Total
Fred
P12,000
30,000
20,000
( 35,000)
( 35,000)
( 35,000)
P 7,000
( P29,000)
(P11,000)
3,000)
2-6:
b
Average Capital
Date
January 1
July 1
August 1
Capital
Balance
140,000
180,000
165,000
Months
Unchanged
6
1
5
12
Peso
Months
P 840,000
180,000
__825,000
P1,845,000
P153,750
Interest
P 15,375
(P153,750 X 10%)
22
2-7:
Chapter 2
c
Date
January 1
April 1
June 1
September 1
Capital
Balance
P16,000
17,600
19,200
15,200
Months
Unchanged
3
2
3
4
12
Average Capital(P201,600/12) =
2-8:
2-9:
P16,800
a
Net profit before bonus
Net profit after bonus (P24,000/120%)
Bonus to RJ
Balance (P24,000-P4,000)X3/5
Total profit share
P 24,000
__20,000
4,000
__12,000
P 16,000
a
Interest
Salaries
Balance, 3:2
Total
2-10:
Peso
Months
P 48,000
35,200
57,600
__60,800
P201,600
LT
P3,200
15,000
(11,580)
P 6,620
AM
P 3,600
7,500
( 7,720)
P 3,380
b
Net income after salary, interest and bonus
Add back: Salary (P10,000 X 12)
P120,000
Interest (P250,000 X .05)
__12,500
Net income after bonus (80%)
Net income before bonus (P600,000/80%)
Paul's bonus
Total
P 6,800
22,500
( 19,300)
P 10,000
P467,500
_132,500
P600,000
_750,000
P150,000
2-11:
b
CC
DD
EE Total
P 14,000
P14,000
P 8,400
Salary
000
Balance
28,000
Additional profit to DD
______
Total
( 1,500)
__2,100
P12,500
P10,500
Net income
Fees Earned
Expenses
Net Income
P90,000
_48,000
P42,000
5,600
(
600)
P 19,000
,000
Partnership Operations
2-12:
c
Interest
LL
P 2,000
MM
P 1,250
NN Total
P 750
8,500
9,500
5,700
3,800
_____
__7,050
_____
P20,000
P14,000
P 4,550
RR
SS
TT
P15,000
(P10,000)
_47,500
_35,625
_11,875
P62,500
P25,625
P11,875
BB
CC
000
Annual Salary
8,500
Additional profit to give LL, P20,000
19,000*
Additional profit to give MM, P14,000
__7,050
Total
550
*(P9,500/50%) = P19,000
2-13:
a
Excess (Deficiency)
RR (P80,000 - P95,000)
SS (P50,000 - P40,000)
P 5,000
Balance 4:3:1
__95,000
Total
P100,000
Net Income (200,000 - 100,000) =
2-14:
b
AA - 100,000 X 10%
Total
)
)
P100,000
AA
P 10,000
Total
)
2-15:
150,000 X 20%
P 40,000
Remainder, 210,000
BB (60,000 X .05)
CC (60,000 X .05)
6,000
Balance, equally
_204,000
Total
P250,000
a
30,000
P 3,000
)
P 3,000
__68,000
_68,000
_68,000
P108,000
P71,000
P71,000
AJ
Bonus to CJ
Net profit before bonus
P44,000
Net profit after bonus (P44,000/110%)P40,000
P4,000
Interest to BJ
1,000
Salaries
P 10,000
22,000
Balance, 4:4:2
__6,800
_17,000
Total
P 16,800
P44,000
2-16:
c
Total profit share of Pedro
Less: Salary to Pedro
Interest
Share in the balance (40%)
BJ
CJ
P4,000
P1,000
12,000
_6,800
__3,400
P7,800
P19,400
P200,000
P 50,000
__20,000
__70,000
P130,000
P325,000
P150,000
__70,000
24
2-17:
Total
_220,000
P545,000
Chapter 2
c
Net income before extraordinary gain and bonus (69,600-12,000)
Net income after bonus (57,600/120%)
Bonus to RR
P 57,600
_48,000
P 9,600
P 24,000
P 24,000
__4,800
P 28,800
RR
P 9,600
24,000
P 33,600
__7,200
P 40,800
Total
P 9,600
48,000
P 57,600
_12,000
P 69,600
2-18:
a
Interest
Annual Salary
Remainder 60:40
Total
2-19:
Mel
P 20,000
36,000
__60,000
P116,000
Jay
P 12,000
_40,000
P 52,000
Total
P 32,000
36,000
_100,000
P168,000
DV
P 15,000
JE
P 3,750
FR Total
(P 7,500)
( 36,875)
( 22,125)
( 14,750)
a
Interest on excess (Deficiency)
P 11,250
Remainder 5:3:2
( 73,750)
Total
(P 21,875)
(P 18,375) (P 22,250)
2,500)
2-20:
c
Correction of 2013 profit:
Net income per books
Understatement of depreciation
Overstatement of inventory, December 31
Adjusted net income
P 19,500
( 2,100)
( 11,400)
P 6,000
Pete
Rico Total
P 9,750
P 9,750
( 3,000)
( 3,000)
P 6,750
P 6,750
500
000)
Required Decrease
P 13,500
2-21:
a
Tiger
P 64,000
Salaries
P164,000
Interest
54,000
Bonus (P360,000-P54,000)X.25
76,500
Remainder, 30:70
__65,500
Total
P360,000
Woods Total
P100,000
24,000
30,000
76,500
__19,650
__45,850
P184,150
P175,850
Partnership Operations
2-22:
a
Clotty
Cotto
Total
2-23:
Salaries
Commission
Interest
Bonus, schedule 1
Remainder, 60:40
Total
Schedule 1
Net income before salary, commission,
interest and bonus
Less: salaries
Net income before bonus
Net income after bonus (P180,000/120%)
Bonus
a
P 20,000
32,000
30,000
__35,640
P117,640
P 25,000
33,600
_23,760
P 82,360
P 20,000
25,000
65,600
30,000
__59,400
P200,000
P200,000
__20,000
P180,000
_150,000
P 30,000
Mike
P600,000
Tyson
P400,000
100,000
200,000
-200,000
( 100,000)
P500,000
P500,000
P200,000
P300,000
__60,000
__40,000
P260,000
P340,000
P760,000
P840,000
( 200,000)
( 300,000)
P560,000
P540,000
300,000
Capital balance before profit and loss distribution
P1,000,000
Net income:
Salary
0,000
Balance, 3:2
__100,000
Total
0,000
Total
P1,600,000
Drawings
00,000)
Capital balance, end
P1,100,000
2-24:
d
Average Capital - King:
Date
January 1
April 1
Capital
Balance
P40,000
55,000
Months
Unchanged
3
9
12
Peso
Months
P120,000
_495,000
P615,000
Months
Peso
Date
January 1
April 1
Balance
P100,000
130,000
Unchanged
7
5
12
Months
P700,000
__650,000
P1,350,000
Chapter 2
Interest
Bonus, Schedule 2
Salaries
Residual, 50:50
Total
King
P 5,125
12,725
25,000
( 2,050)
P40,800
Queen
P11,250
30,000
_(2,050)
P39,200
Total
P16,375
12,725
55,000
_(4,100)
P80,000
Schedule 2
Net income before allocation
Less: Interest
Net income before bonus
Net income after bonus (P63,625/125%)
Bonus
P80,000
_16,375
P63,625
_50,900
P12,725
King
P40,000
_15,000
Queen
P100,000
__30,000
Total
P140,000
__45,000
P55,000
40,800
( 20,800)
P75,000
P130,000
39,000
( 20,800)
P148,400
P185,000
80,000
( 41,600)
P223,400
d
Total receipts (P1,500,000 + P1,625,000)
Expenses
Net income
Distribution to Partners
Red P1,500,000/P3,125,000 X P2,045,000 =
Blue P1,625,000/P3,125,000 X P2,045,000 =
P3,125,000
( 1,080,000)
P2,045,000
P 981,600 (1)
_1,063,400
P2,045,000
P 374,000
___22,000
P 396,000
1,063,400
( 750,000)
P 709,400 (2)
Partnership Operations
2-26:
a
Ray
P150,000
Sam
P180,000
_______
__60,000
150,000
240,000
15,000
20,000
51,000
34,000
66,000
54,000
Total
510,000
Salaries
_42,000
216,000
294,000
_18,000
_24,000
Total
552,000
Drawings
(42,000)
234,000
318,000
(18,000)
(24,000)
P216,000
P294,000
Susan
P150,000
Tanny
P30,000
a
Capital balances, 1/1
P180,000
Additional investment, 4/1
8,000
Capital withdrawals, 7/1
_(6,000)
Balances before profit distribution
182,000
Profit distribution:
8,000
_______
(6,000)
158,000
24,000
Interest
23,400
4,050
27,450
Bonus (20% x P30,000)
6,000
6,000
Balance, equally
(1,725)
(1,725)
Total
21,675
_8,325
179,675
32,325
(12,000)
(12,000)
(3,450)
30,000
Total
212,000
Drawings
(24,000)
Capital balances, 12/31
P167,675
P20,325
P188,000
28
2-28:
Chapter 2
a
Capital balances, beg. 1st year
P300,000
Loss distribution, 1st year:
Salaries
30,000
Interest
30,000
Balance, 5:3:2
(80,000)
Total
(20,000)
Total
280,000
Drawings
(30,000)
Capital balances, beg. 2nd year
250,000
Profit distribution, 2nd year:
Salaries
Sin
P110,000
Tan
P80,000
20,000
Uy
P110,000
10,000
11,000
8,000
11,000
(40,000)
(16,000)
(24,000)
( 9,000)
( 8,000)
( 3,000)
101,000
72,000
107,000
(10,000)
(10,000)
(10,000)
91,000
62,000
97,000
20,000
10,000
30,000
Interest
9,100
6,200
9,700
( 7,500)
( 4,500)
( 3,000)
21,600
_1,700
16,700
112,600
63,700
113,700
_(10,000)
(10,000)
_(10,000)
P102,600
P53,700
P103,700
Jay
P30,000
Kay
P30,000
Loi
P30,000
_(5,000)
_(4,000)
5,000
______
25,000
26,000
35,000
3,000
7,000
_1,000
3,000
3,000
_1,000
_1,000
36,000
30,000
39,000
5,000
______
_(3,000)
_(8,000)
41,000
27,000
31,000
3,600
3,000
3,900
7,000
_1,500
_1,500
_1,500
53,100
31,500
36,400
______
_(4,000)
6,000
_(2,000)
53,100
27,500
40,400
5,310
3,150
3,640
7,000
__3,300
__3,300
__3,300
25,000
Balance, 5:3:2
(15,000)
Total
40,000
Total
290,000
Drawings
_(30,000)
Capital balances, end of 2nd year
P260,000
2-29:
c
Capital balances, 1/1/011
P90,000
Additional investment, 2011
Capital withdrawal, 2011
_(9,000)
Capital balances
86,000
Profit distribution, 2011:
Interest
Salary
Balance, equally
__3,000
Capital balances, 1/1/12
105,000
Additional investment, 2012
Capital withdrawal, 2012
(11,000)
Capital balances
99,000
Profit distribution, 2012:
Interest
10,500
Salary
Balance, equally
__4,500
Capital balances, 1/1/013
121,000
Additional investment, 2013
Capital withdrawal, 2012
_(6,000)
Capital balances
121,000
Profit distribution, 2012:
Interest
12,100
Salary
Balance, equally
___9,900
P68,710
P33,950
(2,000)
(2,000)
P66,710
P31,950
P47,340
(2,000)
P45,340
Partnership Operations
2-30:
a
Ken
Capital balances, 1/1/012
P300,000
Additional investment, 2012
40,000
Capital withdrawal, 2012
( 20,000)
Balances
320,000
Profit distribution, 2012 (Schedule 1)
Salary
60,000
Balance, beg. Capital ratio
60,000
Capital balances, 1/1/013
440,000
Capital withdrawal, 2013
( 60,000)
Balances
380,000
Profit distribution, 2013:
Salary
60,000
Balance, beg. capital ratio
__60,000
Capital balances, 12/31/013
P500,000
P100,000
Len
P100,000
P100,000
40,000
( 20,000)
_______
_______
80,000
140,000
100,000
60,000
20,000
20,000
20,000
100,000
160,000
180,000
( 20,000)
( 40,000)
_______
80,000
120,000
180,000
60,000
__13,636
__21,818
__24,546
P 93,636
P141,818
P264,546
Mon
P500,000
_260,000
P240,000
P120,000
2-31:
d
Capital balance, 1/1/013
Additional investment
Withdrawals
Cap. bal. before P/L dist.
NP: Salary (16,500 x 12)
Interest on EC (15%)
Balance 25:30:45
Total
Capital balance 12/31/013
2-32:
_Nardo_
P280,000
96,000
376,000
42,000
( 19,875 )
22,125
P398,125
__Orly
P300,000
60,000
( 90,000 )
270,000
198,000
45,000
( 23,850 )
219,150
P 489,150
d
Sam capital, beginning
Additional investment (Land)
Drawings
Capital balance before net profit (loss)
Capital balance, end
Profit share (40%)
Net profit (P50,000 40%)
__Pedro_
P170,000
( 72,000 )
98,000
25,500
( 35,775 )
( 10,275 )
P 87,725
P120,000
60,000
( 80,000 )
100,000
150,000
50,000
P125,000
30
2-33:
Chapter 2
a
__Joe__
Capital balance, 1/2/012
P 80,000
Net loss- 2012:
Annual salary
96,000
10% interest on beg. capital
8,000
Bal. beg. cap. ratio: 8:4
( 108,000)
Total
( 4,000)
Capital balance
76,000
Drawings
( 4,000)
Capital balance, 12/31/012
72,000
Net profit- 2013:
Annual salary
96,000
10% interest on BC
7,200
Bonus to JoeNPBB
P 22000
NPAB (22000/110%)20000 2,000
Balance equally
( 67,300)
Total
37,900
Total
109,900
Drawings
( 4,000)
Capital balance, 12/31/013
2-34:
_Total_
P750,000
156,000
(162,000)
744,000
198,000
112,500
(79,500 )
231,000
P975,000
a
Decrease in capital
Drawings
Contribution
Profit share
Net income (45,000 30)
105,900
__Tom__
P 40,000
__Total__
P120,000
48,000
4,000
( 54,000)
( 2,000)
38,000
( 4,000)
34,000
144,000
12,000
( 162,000)
( 6,000)
114,000
( 8,000)
106,000
48,000
3,400
144,000
10,600
( 67,300)
( 15,900)
18,100
( 4,000)
2,000
( 134,600)
22,000
128,000
( 8,000)
14,100
120,000
P 60,000
( 130,000)
25,000
45,000
P150,000
2-35:
b
2011:
Original profit allocation
Salaries
Balance of profit
Total
Cris
P 80,000
100,000
P180,000
Paul
P 60,000
100,000
P160,000
Bryan
P 60,000
100,000
P160,000
Total
P200,000
300,000
P500,000
P 80,000
7,500
91,200
P178,799
P 60,000
13,200
91,200
P164,400
P 60,000
5,700
91,200
P156,900
P200,000
26,400
273,600
P500,000
Difference in total
P 1,300
P (4,400)
P 3,100
Cris
P 80,000
70,000
P150,000
Paul
P 60,000
70,000
P130,000
Bryan
P 60,000
70,000
P130,000
Total
P200,000
210,000
P410,000
Revised allocation:
Salaries
Interest on capital (Sch. B)
Balance of profit
Total
P 80,000
3,944
66,700
P150,644
P 60,000
2,428
P 66,700
P129,128
P 60,000
3,528
P 66,700
P130,228
P200,000
9,900
P200,000
P410,000
Difference in totals
Total of differences
P
P
P
872
P (3,528)
Partnership Operations
2-35: Continued
2012
(644)
656
P
P
(228)
2,872
P
P
0
0
Date
January 1
March 31
September 30
Capital
Balance
P180,000
30,000
10,000
Fraction of
Year Unchanged
3/12
6/12
3/12
Average
Capital
P45,000
15,000
2,500
P62,500
Paul
January 1
March 31
P250,000
80,000
3/12
6/12
P62,500
40,000
Bryan
September 30
30,000
3/12
7,500
P110,000
January 1
September 30
P60,000
10,000
9/12
3/12
P45,000
2,500
P47,500
Interest at 12%:
Cris:
Paul:
Bryan:
P62,500 x 12% =
P110,000 x 12%=
P47,500 x 12% =
P7,500
P13,200
P5,700
32
Chapter 2
2-35: Continued
Capital
Balance
P188,700
18,700
Date
January 1
March 31
Fraction of
Year Unchanged
1/12
11/12
Average
Capital
P15,725
17,142
P32,867
Paul
January 1
March 31
P194,400
4,400
1/12
11/12
P16,200
4,033
P20,233
Bryan
January 1
September 30
P166,900
16,900
1/12
11/12
P13,908
15,492
P29,400
Interest at 12%:
Cris:
Paul:
Bryan:
2-36:
P32,867 x 12% =
P20,233 x 12%=
P29,400 x 12% =
P3,944
P2,428
P3,528
a
Salaries
Gabriel
P35,000
Harry
P40,000
Cumulative Total
P 75,000
Bonus (Sch. A)
Interest on capital (Sch. B)
Remainder of profit
Total
12,000
11,467
11,280
P69,747
87,000
103,800
132,000
5,333
16,920
P62,253
Date
January 1
April 1
November 1
November 1
Capital Balance
P120,000
140,000
170,000
160,000
Fraction
3/12
512
2/12
2/12
Average Capital
P 30,000
58,333
28,333
26,667
P143,333
Partnership Operations
2-36: Continued:
Partner
Harry
Date
January 1
November 1
Interest therefore:
Gabriel:
P143,333 x 8% =
Harry:
P66,667 x 8% =
2-37:
Capital Balance
60,000
100,000
Fraction
10/12
2/12
Average Capital
P50,000
16,667
P66,667
P11,467
P5,333
a
Adjustments to Income:
2011
P(5,000)
3,000
(2,000)
8,400
P 4,400
2012
P (5,000)
(3,000)
2,000
(8,400)
4,000
(8,600)
(3,000)
P(22,000)
Dory
Eva
P25,000
400
1,200
(2,000)
(7,000)
(5,000)
P12,600
P30,000
P28,000
1,200
1,600
(7,000)
(6,000)
P24,200)
P23,600
Schedule 1:
Bonus = 10% (1 - Bonus)
Bonus = 10% (P4,400 Bonus)
110% Bonus = P440
Bonus = P400
Schedule 2:
Bonus = 10% )1 Bonus)
Bonus = 10% (P22,000 Bonus)
110% Bonus = (P2,200)
Bonus = (P2,000)
34
2-38:
Chapter 2
b
Old Partners Capital Balances before Admission of New Partner:
Alma
P480,000
Betty
P240,000
Total
P720,000
480,000
48,000
(552,000)
(24,000)
456,000
(24,000)
432,000
240,000
24,000
(276,000)
(12,000)
228,000
(24,000)
204,000
720,000
72,000
(828,000)
(36,000)
684,000
(48,000)
636,000
576,000
43,200
(397,800)
221,400
653,400
(24,000)
P629,400
288,000
20,400
(397,800)
(89,400)
114,600
(24,000)
P90,600
864,000
63,600
(795,600)
132,000
768,000
(48,000)
P720,000
P400,000
448,000
P 48,000
Revenue
Cost of goods sold
Depreciation
Net profit
Interest - Riza:
25,000 x 2/12 =
20,000 x 10/12 =
Ave. capital
Rate
Interest
Partnership Operations
Mark
P18,000
Total
P43,000
1,042
8,705
900
6,000
4,353
P34,747
(8,000)
P23,253
1,942
8,000
13,058
23,000
(8,000)
P58,000
P108,000
(80,000)
( 5,000)
P 23,000
**
2-40:
Riza
P25,000
P 4,167
16,667
P20,834
5%
P 1,042
Interest - Mark
18,000 x 12/12 = P18,000
Rate
5%
Interest
P 900
a
Distribution of Profit:
Salaries
Bonus to Parco**
Balance (squeeze)
Total profit share *
**
Romeo
P34,000
52,200
P86,200
Parco
P59,000
21,750
34,800
P115,550
Total
P93,000
21,750
87,000
P201,750
P142,200
34,000
35,000
(40,000)
(85,000)
P 86,200
Bonus to Parco:
Net income after salaries and bonus
Rate
Bonus
P 87,000
25%
P 21,750
Partnership Operations
36
SOLUTIONS TO PROBLEMS
Problem 2 1
1.
Castro
Diaz
:
:
(P26,000/P42,500) x
(P16,500/P42,500) x
P23,800
P23,800
=
=
P14,560
__9,240
P23,800
2.
Castro
Diaz
:
:
(P31,250/P50,000) x
(P18,750/P50,000) x
P23,800
P23,800
=
=
P14,875
__8,925
P23,800
Months
Unchanged
3
1
3
5
12
P31,250
Peso
Months
P 78,000
29,000
108,000
_160,000
P375,000
Diaz:
Capital
Date
Balances
1/1..................................... P16,500
6/1.....................................
21,500
9/1.....................................
19,500
Months
Unchanged
5
3
4
12
P18,750
Interest........................................................
Salaries........................................................
Balance, equally..........................................
Total............................................................
Castro
P 7,500
36,000
( 24,100)
P19,400
Diaz
P4,500
24,000
(24,100)
P 4,400
Total
P12,000
60,000
( 48,200)
P23,800
Bonus (a)....................................................
Interest (b)...................................................
Balance, 3:2................................................
Total............................................................
Castro
P 4,760
1,100
_10,764
P16,624
Diaz
P
_7,176
P7,176
Total
P 4,760
1,100
_17,940
P23,800
4.
37
Chapter 2
Computations:
a. Net profit before bonus................................................
Net profit after bonus (P23,800 125%).....................
Bonus...........................................................................
b.
5.
Peso
Months
P 82,500
64,500
__78,000
P225,000
Castro
Diaz
P23,800
_19,040
P 4,760
P29,000
_18,000
P11,000
___10%
P 1,100
:
:
P14,280
__9,520
P23,800
(P3,000/P5,000) x P23,800
(P2,000/P5,000) x P23,800
=
=
Problem 2 2
a.
Average Capital:
Robin:
Date
Jan. 1
Feb. 28
Balances
P135,000
95,000
Months
Unchanged
2
2
Peso
Months
P270,000
190,000
Apr. 30
Sept. 30
175,000
195,000
5
3
12
875,000
__585,000
P1,920,000
Months
Unchanged
3
3
2
2
2
12
Peso
Months
P420,000
600,000
300,000
440,000
__400,000
P2,160,000
Date
Balances
Jan. 1
Mar. 31
June 30
Aug. 31
Oct. 31
P140,000
200,000
150,000
220,000
200,000
P240,000
_270,000
P510,000
Partnership Operations
b.
Interest on ave. capital.........................................
Salaries................................................................
Bonus (P510,000 30,600 160,000) x 25%)....
Balance, equally..................................................
Totals...................................................................
c.
Interest:
Robin (P195,000 P135,000) 10%.............
Hood (P200,000 P140,000) 10%..............
Balance, equally..................................................
Totals...................................................................
d.
38
Robin
P 14,400
60,000
78,850
_119,775
P274,025
Hood
P 16,200
100,000
_119,775
P235,975
Total
P 30,600
160,000
79,850
_239,550
P510,000
Robin
Hood
Totals
P 6,000
249,000
255,000
P 12,000
498,000
510,000
Hood
P120,000
Total
P200,000
62,000
_248,000
P510,000
P 6,000
249,000
255,000
Robin
P 80,000
62,000
_124,000
P266,000
Salaries................................................................
Bonus (see computations below).........................
Balance, equally..................................................
_124,000
Totals...................................................................
P244,000
Bonus Computations:
Net income before salaries and bonus.....................................................
Less Salaries...........................................................................................
Net income before bonus........................................................................
Net income after bonus (P310,000 125%)............................................
P510,000
200,000
310,000
_248,000
Bonus......................................................................................................
P 62,000
Problem 2 3
a.
b.
De Villa
De Vera
Salaries................................................................
P 30,000
Total
P 30,000
20,000
64,000
19,636
__88,364
P222,000
P222,000
( 50,000)
( 64,000)
108,000
_98,182
P 9,818
P 222,000
116,800
105,200
39
Chapter 2
Problem 2 4
a.
Salaries...............................................
Bonus (see computation below)..........
Interest (see computation below)........
Balance, 3:3:4.....................................
Total ...................................................
East
P15,000
3,760
2,800
__3,180
P24,740
North
P20,000
West
P18,000
4,000
__3,180
P27,180
4,800
__4,240
P27,040
Bonus computations:
Net income before bonus..........................................................................
Net income after bonus (P78,960 105%)................................................
Bonus........................................................................................................
Interest computations:
East (10% x P28,000)...............................................................................
North (10% x P40,000).............................................................................
West (10% x P48,000)..............................................................................
Total..........................................................................................................
b.
Interest (see computations below)......
Salaries...............................................
Bonus (see computations below)........
Balance, equally.................................
Total ...................................................
East
P 3,133
24,000
( 6,056)
P 21,077
North
P 3,633
21,000
4,280
( 6,055)
P 22,858
West
P 5,200
25,000
( 6,055)
P 24,145
Total
P53,000
3,760
11,600
_10,600
P78,960
P78,960
_75,200
P 3,760
P 2,800
4,000
__4,800
P11,600
Total
P11,966
70,000
4,280
( 18,166)
P 68,080
Interest computations:
Average capitals:
East:
Date
1/1
5/1
9/1
Months
Unchanged
4
4
4
12
Balances
P30,000
36,000
28,000
Pesos
Months
P120,000
144,000
_112,000
P376,000
P 31,333
North:
Pesos
Months
P80,000
124,000
72,000
_160,000
P436,000
Date
1/1
3/1
7/1
9/1
Months
Unchanged
2
4
2
4
12
Balances
P40,000
31,000
36,000
40,000
P 36,333
Partnership Operations
40
West:
Date
1/1
4/1
6/1
8/1
Months
Unchanged
3
2
2
5
12
Balances
P50,000
57,000
60,000
48,000
P 52,000
Interest Computations:
East (10% x P31,333)...........................................................
North (10% x P36,333).........................................................
West (10% x P52,000)..........................................................
Total.....................................................................................
P 3,133
3,633
__5,200
P 11,966
Bonus Computations:
Net income...........................................................................
Less Salary...........................................................................
Net income before bonus......................................................
Net income after bonus (P47,080 110%)...........................
Bonus to North.....................................................................
* To Total
c.
Pesos
Months
P150,000
114,000
120,000
_240,000
P624,000
East
North
P 68,000
_21,000
47,080
_42,800
P 4,280
West
Total
P 8,990
P21,000 P 18,000
3,000
4,000
5,000
_13,180 _11,532.50 __8,237.50
P37,180 P33,532.50 P22,227.50
P 8,990
39,000
12,000
_32,950
P92,940
Bonus Computations:
Net income before salaries & bonus..........................................................
Less Salaries (P21,000 + P18,000)............................................................
Net income before bonus..........................................................................
Net income after bonus (P53,940 120%)................................................
Bonus to West...........................................................................................
P92,940
_39,000
P53,940
_44,950
P 8,990
Problem 2 5
a.
Maria
P12,000
7,200
__3,133
P22,333
Clara
P10,000
9,600
__3,133
P22,733
Rita
P 8,000
13,800
__3,134
P24,934
41
Total
P30,000
30,600
__9,410
P70,000
Chapter 2
P 3,200
__4,000
P 7,200
9,600
P10,800
__3,000
_13,800
P30,600
Maria
P 80,000
20,000
22,333
( 10,000)
P112,333
Problem 2 6
Clara
P120,000
22,733
( 10,000)
P132,733
Rita
P180,000
( 30,000)
24,934
( 10,000)
P164,934
Total
P380,000
20,000
( 30,000)
70,000
( 30,000)
P410,000
1.
2.
Alvin
P 20,000
Benny
Celia
12,000
20,000
(29,400)
P 2,600
_(29,400)
P( 9,400)
22,000
_(39,200)
P(17,200)
54,000
_(98,000)
P(24,000)
Benny
P180,000
60,000
________
240,000
__(9,400)
230,600
_______
P230,600
Celia
P220,000
40,000
_(20,000)
240,000
_(17,200)
222,800
_______
P222,800
Total
P520,000
100,000
_(20,000)
600,000
_(24,000)
576,000
_(16,000)
P560,000
Alvin
P120,000
_______
120,000
__2,600
122,600
_(16,000)
P106,600
Partnership Operations......................................
Problem 2-6: Continued
3.
Total
P20,000
42
Correcting entry:
Celia capital.......................................
2,400
Alvin capital...............................
2,200
Benny capital.............................
200
To correct capital accounts for error in loss allocation computed as follows:
Alvin
Benny
Celia
Correct loss allocation........................
P2,600
P(9,400) P(17,200)
Actual loss allocation.........................
__(400)
__9,600
__14,800
Adjustment.........................................
P2,200
P 200
P ( 2,400)
Problem 2 7
Dino
P45,000
_15,000
60,000
(1,800)
(17,000)
41,200
_____
41,200
10,800
(17,000)
Nelson
P45,000
_15,000
60,000
( 1,800)
( 7,000)
51,200
_____
51,200
8,100
( 7,000)
Oscar
P45,000
__6,000
51,000
( 1,800)
( 3,200)
46,000
__6,000
52,000
8,100
( 3,200)
Total
P135,000
__36,000
171,000
( 5,400)
( 27,200)
138,400
___6,000
144,400
27,000
( 27,200)
52,300
______
52,300
42,272
( 9,000)
P86,572
56,900
___6,000
62,900
20,363
( 3,200)
P80,063
144,200
___6,000
150,200
120,000
( 31,200)
P239,000
Nelson
P24,000
10,909
3,600
__4,763
P43,272
Oscar
P12,000
3,600
__4,763
P20,363
Total
P84,000
10,909
10,800
__14,291
P120,000
Schedule 1:
Annual salaries...................................
Bonus (see computations below)........
Interest................................................
Balance, equally.................................
Totals..................................................
Dino
P48,000
3,600
_* 4,765
P56,365
Bonus computations:
Net income before bonus......................................................................
Net income after bonus (P120,000 110%)..........................._109,091
Bonus to Nelson....................................................................................
P120,000
P 10,909
* To Total
43
2
Chapter
Problem 2 8
Red, White & Blue Partnership
Statement of Partners' Capital
For Year Ended December 31, 2013
Red
40,200
8,800
White
20,200
4,800
Blue
40,600
4,400
_22,800
_71,800
10,400
_22,800
_47,800
8,800
_11,400
_56,400
11,600
2,400
900
P12,800
P59,000
P 9,700
P38,100
1,800
P13,400
P43,000
Green
3,200
______
__3,200
5,000
Total
P101,000
18,000
3,200
_57,000
179,200
35,800
P 5,000
P (1,800)
3,300
1,800
P 40,900
P138,300
P120,000
P38,700
__1,800
36,900
$26,000 x 0.10
$10,000 x 0.10 x 1/2
Total expenses, excluding doubtful accounts expense
Add: Doubtful accounts expense ($3,000 x 0.60)
Total expenses
Net income for year ended Dec. 31
2,600
____500
P40,000
__1,800
41,800
P 78,200
P 8,800
48,000
4,400
P18,000
24,000
__8,000
P16,000
P 3,200
__21,200
P 57,000
P22,800
22,800
_11,400
P57,000
Problem 2 9
Allan, Eman and Gino Partnership
Statement of Profit Distribution
Year Ended December 31, 2013
Allan
Eman
Gino
Total
Interest
Commission (P16,120 P5,000) x 10%
Balance, equally
P 4,000
__5,926
P 750
1,112
_5,925
P 250
1,112
_5,925
P 5,000
2,224
_17,776
Total
Adjustments (50% of P25,000 to Allan)
P 9,926
__2,574
P7,787
(1,287)
P7,287
(1,287)
P25,000
_____
Total
P12,500
P6,500
P6,000
P25,000
Sonny
Letty
Total
Problem 2 10
Gary, Sonny, and Letty Partnership
Statement of Partners' Capital Accounts
Year Ended December 31, 2013
Gary
P210,000
___9,100
P180,000
_______
P 90,000
_______
P480,000
__9,100
Total
Profit distribution:
Salaries
Interest
Bonus to Gary and Sonny (Schedule 1)
Balance, equally
_219,100
_180,000
_90,000
489,100
10,640
10,800
35,840
58,320
13,680
25,920
__(9,720)
11,520
21,600
_(9,720)
_(9,720)(29,160)
Total
__29,880
_23,400
_11,720
Total
Drawings
_(48,000)
248,980
_(21,000)
203,400
101,720
(18,000) __(9,000)
P227,980
P185,400
P 92,720
_65,000
554,100
P506,100
P 65,000
P35,840
_58,320
__94,160
P(29,160)
Problem 2 11
a. Entries to record the formation of the partnership and the events that occurred during 2013:
Cash
Inventory
Land
Equipment
Mortgage payable
1,100,000
800,000
1,300,000
1,000,000
500,000
(2)
(3)
Inventory
Cash
Accounts payable
200,000
2,200,000
1,300,000
300,000
240,000
60,000
Mortgage payable
Interest expense
Cash
50,000
20,000
35,000
70,000
Interest expense
Cash
(4)
(5)
(6)
(7)
(8)
Accounts receivable
Cash
Sales
20,000
55,000
210,000
1,340,000
1,550,000
340,000
Depreciation expense
Accumulated depreciation
60,000
Kobe, drawing
Lebron, drawing
Cash
Sales
278,000
62,000
60,000
104,000
104,000
208,000
1,550,000
Income summary
(9)
1,550,000
900,000
900,000
Partnership Operations
46
Income summary
Cost of good sold
Selling and general expenses
Depreciation expense
Interest expense
1,340,000
900,000
340,000
60,000
40,000
Income summary
Kobe, capital
Lebron, capital
210,000
Kobe, capital
Lebron, capital
Kobe, drawing
Lebron, drawing
104,000
104,000
105,000
105,000
104,000
104,000
Lebron
40%
P1,300,000
Total
100%
- P 1,340,000 expenses)
Interest on beginning capital
balances (3%)
(105,000)
210,000
66,000
39,000
120,000
120,000
(81,000)
(54,000)
P105,000
Salaries
(240,000)
P(135,000)
Residual deficit
(135,000)
Total
b.
P105,000
P105,000
-0-
Kobe-Lebron Partnership
Statement of Comprehensive Income
For the Year Ended December 31, 2013
Sales
P1,550,000
Less: Cost of goods sold:
Inventory, January 1
Purchases
Goods available for sale
Less: Inventory, December 31
(900,000)
Gross profit
Less: Selling and general expenses
Depreciation expenses
Operating income
Nonoperating expense- interest
Net income
P800,000
300,000
P1,100,000
(200,000)
P650,000
340,000
60,000
400,000
P250,000
(40,000)
P210,000
47
2
Chapter
c.
Kobe-Lebron Partnership
Statement of Financial Position
At December 31, 2013
Assets
Cash
Accounts receivable
Inventory
Land
Equipment (net)
Total assets
P1,589,000
210,000
200,000
1,300,000
940,000
P4,239,000
P60,000
62,000
165,000
450,000
P737,000
P2,201,000
1,301,000
3,502,000
P4239,000