ACTIVITY 3-1 ACTIVITY 3-2 ACTIVITY 3

1 1 1 Income Summary 1
2 1 2 Industrial partner 2
3 0 3 Capital contributions 3
4 0 4 More than one capital account 4
5 0 5 Services rendered 5
6 1 6 Bonus 6
7 1 7 Distribution of net income and net losses 7
8 0 8 Profit and loss ratio 8
9 0 9 Statment of Changes in Partner's Equity 9
10 1 10 Statement of Financial Position 10
ACTIVITY 3-3
D
C
B
A
C
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C
D
 ACTIV

JJJ Partnership
Income Statement
December 31, 2020
Revenues
Sales
Sales Discount -12,000
Sales Returns and Allowances -4,500

Cost of Goods Sold

Merchandise Inventory (Jan. 1) 50,000
Add: Purchases 300,000
Less: Purchase Discount -8,000
Add: Freight-in 7,500
Less: Merchandise Inventory (Dec. 31) -26,500
Total Revenue

Expenses
Rent Expense 10,000
Salaries and Wages 90,000
Supplies Expense 9,500
Taxes and Licenses Expense 15,000
Utilities Expense 60,000
Total Expenses
Net Income
ACTIVITY 3-4

JJJ Partnership
Income Statement
For the year ended December 31, 2020
Distribution of Net Income
800,000 Computational Notes to Financial Statement
Note 1: James share in net income = 92,000
Note 2: John share in net income = 92,000
783,500 Note 3: Jude share in net income = 92,000
Net Income is dived among the three partners equally.

-323,000
460,500

-184,500
276,000
 JJJ Partnership
Income Statement
year ended December 31, 2020
stribution of Net Income
Statement
e = 92,000
= 92,000
= 92,000
ree partners equally.
 ACTIVITY 3-5

LOVE Trading
DATE PARTICULARS PR DEBIT
Income Summary 450,000
Luz, Capital (450,000 x 3/10)
Olivia, Capital (450,000 x 4/10)
Vera, Capital (450,000 x 2/10)
Ethel, Capital (450,000 x 1/10)
Distribution of Net Income to Partners.
ACTIVITY 3-5

Distribution of Net Income

CREDIT Luz Olivia Vera Ethel
3 4 2 1
135,000
180,000
90,000
45,000
e
Total
10
 ACTIVITY 3-6

Maria
Average Capital
Date Capital Balance Number of Months Unchanged Peso Month
Jan. 1 200,000 2 400,000
Mar. 1 150,000 6 900,000
Aug. 31 250,000 1 250,000
Oct. 1 230,000 2 460,000
Dec. 1 380,000 1 380,000
12

Martha
Average Capital
Date Capital Balance Number of Months Unchanged Peso Month
Jan. 1 400,000 1 400,000
Feb. 1 390,000 4 1,560,000
May 31 440,000 1 440,000
Jul. 1 410,000 5 2,050,000
Nov. 1 510,000 1 510,000
12

Interest on wt. average capital Maria Martha

Maria (12% x 199,167) 23,900
Martha (12% x 413,333) 49,600

Balance per ratio Maria 1/3, Martha 2/3 15,500 31,000

Allocation of Profit 39,400 80,600
Total Peso Month Average Capital

2,390,000 199,167

Total Peso Month Average Capital

4,960,000 413,333

Total
23,900
49,600
73,500
46,500
120,000
 ACTIVITY 3-7

Distribution of Net Income to Partners

Martin Isidore
10% interest on the partners' original investment 100,000 50,000
Allowance of annual salary 120,000 144,000
Balance 2:1 140,000 70,000
Income summary 360,000 264,000

Distribution of Net Income to Partners

Martin Isidore
10% interest on the partners' original investment 100,000 50,000
Allowance of annual salary 120,000 144,000
Balance 2:1 -48,000 -24,000
Net income 172,000 170,000
 Journal Entry
Total Dec. 31 Debit
150,000 Income Summary 624,000
264,000 Martin, Capital
210,000 Isidore,Capital
624,000

Journal Entry
Total Dec. 31 Debit
150,000 Income Summary 342,000
264,000 Martin, Capital
-72,000 Isidore,Capital
342,000
 Martin Investment = 1,000,000
Credit Isidore Investment = 500,000
Net Income of 6 months = 210,000
360,000
264,000

Credit

170,000
170,000
 ACITVITY 3-8

Distribution of Net Loss to Partners

Margaret Elizabeth
10% interest on ending capital 25,000 20,000
Annual salaries to Elizabeth and Cecilia of 120,000 each 120,000
Remainder 4:3:3 -218,480 -163,860
Net loss -193,480 -23,860

Journal Entry
2020
June 30 Debit Credit
Margaret, Drawing 193,480
Elizabeth, Drawing 23,860
Cecilia, Drawing 32,860
Income Summary 250,000
s MEC Partnership
Cecilia Total Margaret, Capital 250,000
11,200 56,200 Elizabeth, Capital 200,000
120,000 240,000 Cecilia, Capital 112,000
-163,860 -546,200
-32,860 -250,000
 ACTIVITY 3-9

Distribution of Net Income

Lucia Jacinta
12% interest on the original capital by the partners 180,000 120,000
Monthly salary 40,000 20,000
Lucia will be given 5% of the net income as a bonus 60,000
Remainder 4:6 480,000 720,000
Net income 760,000 860,000

Partner's Capital Balances

Lucia Jacinta
July 1 Inital investment 1,500,000 1,000,000
Net Income 760,000 860,000
Capital Balance for the year ended Dec. 31 2021 2,260,000 1,860,000
 Total
300,000
60,000
60,000
1,200,000
1,620,000

Total
2,500,000
1,620,000
4,120,000
 ACTIVITY 3-10

Computational Notes to Financial Statement

Note 1: Sales Revenue
Sales P 758000
Less: Sales Discount 11,000
Less: Sales Return and Allowances 15,000
Net Sales Revenue P 732000

Note 2: Cost of Sales

Merchandise Inventory, January 1 P 100000
Purchases P 520000
Purchase Discounts -3,000
Purchase Returns and Allowances -5,000
Net Purchases P 512000
Add: Freight-in 18,000 530,000
Total goods available for sale P 630000
Less: Merchandise Inventory, December 31 -145,000
Total Cost of Sales P 485,000

Trade and Other Receivables

Accounts Receivable P 143000
Less: Allowance for Doubtful Accounts 5,000 P 138000
Notes Receivable 36,700
Total Trade and Other Receivables P 174,700

Note 4: Property, Plant and Equipment

Delivery Equipment P 350000
Less: Accumulated Depreciation 140,000
Total Carrying value P 210,000

Note 5: Trade and Other Payables

Accounts Payable P 93,033
SSS & Philhealth Contributions Payable 2,000
Unearned Commision Income 39,000
Total Trade and Other Payables P 134,033
 RGem Trading
Income Statement
For the year ended December 31, 2020

Net Sales Revenue (Note 1) P 732,000

Cost of Sales (Note 2) -485,000
Gross Profit P 247,000
Operating Expenses
General Administrative Expense P 112,700
Selling Expense 103,100 -215,800
P 31,200

Distribution of Net Income

Gem Romy
5% interest based from original investment 4,000 3,500
Balance: equally 11,850 11,850
15,850 15,850

RGem Trading
Statement of Changes in Partner's Equity
For the year ended December 31, 2020
Gem Romy
Capital, January 1 P 80,000 P 70,000
Add: Net Income 15,850 15,850
Sub-Total P 95,850 P 85,850
Less: Drawing -10,000 5,000
Capital, December 31 P 85,850 P 80,850
 Total
7,500
23,700
31,200

ty
0
Total
P 150,000
31,200
P 181,200
-15,000
P 166,200