On January 1, 2018, Moana and Krystal formed Madams Partnership which

focuses on bulk selling of comic books. Moana has a lot of cash and
charisma while Krystal has the skills to persuade people from her past
professional experiences. To start their operations, Moana invests
Php700,000.00 and Krystal added Php450,000.00. They decided to share
profits evenly.

During the fiscal year the following transactions occurred in the

books of Madams Partnership.

Jan.1 The partnership finds a nice retail shop in the local and
signs a lease for Php16,000.00 a month starting January 1, 2018. The
said amount was inclusive of fixed Php3,0000.00 electricity and
Php1,000.00 for water usage. Payments will be made 10th day of the
following month.

Jan 5 The partnership incurred a total of Php50,000.00

professional fees for its formation to be paid to Atty. Jason. In
order to avoid early outflow of cash, the partners invited him to
their partnership. Jason eventually agreed and added Php350,000.00
cash as investment. The profit-sharing ratio was still retained.

Jan 6 The partnership bought various shelves and furniture

amounting to P60,000.00 and some surveillance cameras, cash register
and a POS computer for Php180,000. The shelves and furniture have two
years of useful life while the cash register, cameras and the computer
are useful for three years. They are to be depreciated on straight-
line and monthly basis with no depreciation to be taken on the whole
January 2018. Paid on the same day.

Jan 30 Bought comic books amounting to Php500,000.00 on cash.

Feb 10 Sold comic books for Php500,000.00 on account. Gross profit

is 30% of selling price.

Feb 15 Bought comic books amounting to Php700,000.00 on account to

be paid on February 28.

Feb 20 The partners are getting occupied and they decided to hire
two employees. The same day, two applicants were accepted and to start
on March 1, 2018 with monthly salary of Php12,000.00 each per month.
The employees will receive the half of the Php12,000.00 every 15th of
the month and the other half after 15 days.

Mar 2 Collection of the 75% of February 10 receivables. The other

25% were collected after five days.

Apr 4 Bought comic books amounting to Php300,000.00 on cash.

Apr 26 Sold 50% of the remaining inventories for 30% mark-up based
on cost. To be collected on April 30.

May 17 Bought Php700,000.00 worth of comic books on account to be

paid after 15 days.

May 25 The partnership decided to venture on other investments.

They bought a two-story, six rooms apartment building near the state
university for Php1,500,000.00. They also agreed that the said
apartment will be depreciated monthly for 10 years. No depreciation to
be taken up for the month of May and June. 2/3 of the value of the
building was personally paid by Moana. The remaining was paid by the
partnership.

Jun 1 A group of students occupied the whole apartment building.

They are to pay monthly rent of P7,000.00 per room per month exclusive
of electricity and utilities, which is to be paid by the tenants.
Payments will be made every 6th of the month.

Jun 19 Sold comic books costing Php1,000,000.00 for 130% of cost.

To be collected on June 30.

Jul 3 Jason sees the bright future of the business, so he invested

additional Php200,000.00 cash.

Aug 13 Bought comic books costing Php2,000,000.00. The supplier’s

mark-up was 30% of sales. Paid after 15 days.

Oct 30 Sold comic books for Php1,800,000.00 on account to be

collected after the All-Souls’ Day. Profit was Php300,000.00

Nov 18 Bought comic books amounting to Php500,000.00 on cash.

Dec 23 Sold 50% of the remaining comic books for 25% mark-up on
cost to be collected on January 8, 2019.

Dec 28 Bought comic books amounting to Php400,000.00 payable on

January 7, 2019.
1. Kindly prepare all the journal entries on the above transaction.

2. Supply the following unknown:

a. Total Current Assets
b. Total Sales
c. Total Partners’ Equity
d. Total Depreciation Expense
e. Carrying amount of PPE
f. Total Cost of Sales
g. Total Operating Expenses