Asdsf

CHAPTER 1
Partnership Formation and Operations

EXERCISES
Exercise 1
1.a
Campos, Capital 14,000

Allowance for Uncollectible Accounts
Goodwill
30,000
Campos, Capital
Accumulated Depreciation
Furniture and Fixtures
14,000
30,000
6,000
12,500

Cash
40,000
1.b
Cash
(P83,500 x 1/2)
41,750
Tomas, Capital
41,750
To record contributions of Tomas
Req. 2.
Campos and Tomas Partnership
Statement of financial Position
July 1, 2008
Assets
Liabilities & Owners Equity
Cash
P41,750 Accounts Payable
P90,000
Accounts Rec l
P60,000
Less Allowance for
Uncol Accts.
24,000
36,000 Tomas, Capital 41,750
Inventory
100,000
Furniture
7,500
Goodwill
30,000
________
TOTAL ASSETS
P215.250
OWNERS
P215,250
TOTAL LIABILITIES &

EQUITY
Exercise 1-2
1.
2.
Cash
90,000
Accounts Receivable
36,000
Merchandise Inventory 54,000
Equipment
25,000
Accounts Payable
21,000
Notes Payable
18,000
Bernal, Capital
164,000
Cash
100,000
Camino, Capital
100,000
Exercise 1 3
2,000
1.
2.
Cash
800,000
Land
540,000
Building
900,000
Legaspi, Capital
Sabino, Capital
800,000
1,440,000
Cash
800,000
Land
540,000
Building
900,000
Legaspi, Capital
Sabino, Capital
1,120,000
1,120,000
Exercise 1 - 4
1.
2.
Income Summary 238,000

Santos, Capital
(P238,000 x 260/425)
Abad, Capital
(P238,000 x 165/425)
145,600
92,400

Santos, Capital (P238,000 x 3,125/5,000)
Abad, Capital (P238,000 x 1,875/5,000)
148,750
89,250
Santos:
Jan. 1
Mar. 31
Apr. 1 Apr. 30
May 1
July 31
Aug. 1 Dec. 31
P260,000 x 3
P780,000
290,000 x 1 290,000
360,000 x 3 1,080,000
320,000 x 5 1,600,000
P3,750,000/12 P312,500
Abad:
May 31 P165,000 x 5
P825,000
Aug. 31
215,000 x 3 645,000
Dec. 31
195,000 x 4 780,000
P2,250,000/12 P187,500
Jan. 1
June 1
Sept.1
3.

Santos, Capital
147,750
Abad, Capital
90,250
Santos
Abad
Total
Interest on ave. capital
P 18,750
P
11,250 P 30,000
Salaries to partners
150,000
100,000
250,000
Balance - equally
( 21,000)
( 21,000)
(42,000)
Net Profit
P 147,750
P
90,250 P238 000
4.

Santos, Capital
Abad, Capital
Santos
Abad
Bonus to Santos
25% (P238,000 - B)
P 47,600
P 47,600
Interest of 6% on excess
average investment
6% (P312,500 - P187,500)
7,500
164,840
73,160
Total
7,500
Balance - 3:2
Net Profit
5.
109,740
P 164,840
73,160
P73,160
182,900
P238,000

Santos, Capital (P238,000 x 15/25)
Abad, Capital (P238,000 x 10/25)
Exercise 1
5
Sanchez and Gomez
Schedule of Distribution of Net Profit
December 31, 2008
Sanchez Gomez Total
6% interest on average capital P 6,246
10% bonus on net profit after interest
Salaries
20,000
30,000
Balance
70%, 30%
17,488
Net Profit
P52,065 P51,935 P104,000
142,800
95,200
P 14.440
8,331
50,000
7,495
P 20,686
8,331
Computation of average capital:

Sanchez, Capital
Gomez, Capital
Jan. 1 P81,600 x 3
P 244,800
Jan. 1 P224,000 x 7
Apr. 1 P111,600 x 9
1,004,400
Aug. 1 P264,000 x 5
P1,249,200
P2,888,000
24,983
Ave. capital (P1,249,200/12)

P240,667
P104,100
P1,568,000
1,320,000
Ave. capital (P2,888,000/12)
Computation of bonus: P160,000 x 65%= P104,000
P20,686 x 10% = P8,331
2.
Sanchez and Gomez
Statement of Partners Capital
For the Year Ended December 31, 2008
Sanchez Gomez Total
Capital, January 1
P 81,600
Additional investment
30,000
Net profit
52,065
Drawings
( 41,600)
(
Capital, December 31
P122,065
3.
P224,000
P305,600
40,000
70,000
51,935
104,000
41,600)
( 83,200)
P274,335
P396,400
Sanchez Gomez Total

6% interest on average capital P 6,246
10% bonus on net profit after interest
P14.440 P 20,686
8,331
8,
331
Balance
Salary ratio
34,083
Net Profit
P48,660 P 55,340
40,000
P104,000
74,983
Exercise 1-6
1.
2.
Mercado Puzon Total

8% interest on beg capital
Salaries
225,000
Balance 3:2
( 38,700)
Net Profit
P234,300
P 48,000
112,500
( 25,800)
P140,700
P 54.000
337,500
( 64,500)
P375,000
P102,000
Mercado Puzon Total

8% interest on beg capital
P 48,000
P 54.000
P102,000
Balance
Salary ratio
182,000
Net Profit
P230,000
P145,000
91,000
273,000
P375,000
3.
Puzon P375,000 x 2/3 = P150,000; however, minimum guaranteed amount is P
160,000
Mercado P375,000 P160,000 = P215,000
Exercise 1
Net profit after salary, interest and bonus

P374,000
Interest
P200,000 x 10%
Salary
P8,000 x 12
116,000
Net profit before interest and salary
90,000
Bonus rate
x 25%
Amount of bonus to Lirio
22,500
Exercise 1 8
1.
B = .25 x P500,000 = P125,000
2.
B = .25 x P500,000
1.25
3.
B = .25 (P500,000 - Tax)

T = .35 x P500,000 = P175,000
B = .25 (P500,000
P175,000)
B = P 81,250
4.
B
B
B
B
B
=
=
=
=
=
P20,000
96,000
P4
P1
= P100,000
.25 (P500,000 - B - Tax)

.25 (P50,0000 - B - P175,000)
P81,250 - .25B
P81,250/1.25
P65,000
Exercise 1 - 9
1.
Estrella
Felipe Garcia Jimenez Total
Salary
P40,000
P20,000
P 60,000
Bonus
6,000
4,000
10,000*
Interest
10,000
9,000
P 4,000
P 9,400
32,400
Balance
26,900
26,900
26,900
26,900
107,60
0
Total
P82,900
P59,900
P30,900
P36,300
P210,000
*B = 5% (P210,000 B) = P10,000
2.
Estrella
Salary
P40,000
P20,000
P 60,000
Interest
10,000
9,000
P 4,000
P 9,400
32,400
Balance ( 43,100)
( 43,100)
( 43,100)
( 43,100)
(172,40
0)
Total
P 6,900
(P 14,100)
(P39,100)
(P33,700)
(P 80,00
0)
3.
Estrella
Interest
P10,000
P 9,000
P 4,000
P 9,400
P 32,400
Bonus
6,000
4,000
10,000
Salary
25,067
12,533
_______
________
37,6
00*
Total
P41,067
P25,533
P 4,000
P 9,400
P 80,00
0
*P37,600 x 4/ 6 = P25,067;
P37,600 x 2/ 6 = P12,533
Exercise 1-10
1.
2.
Fees Earned
750,000
Joseph, Capital 50,000
Luis, Capital
Operating Expenses
Income Summary
200,000
100,000
500,000

Joseph Capital
Luis, Capital
Nicolas, Capital
150,000
250,000
100,000
Exercise 1
11
1.
Benito Cabral Duenas Total
Capital balances before payment
of cash P120,000
P100,000
P100,000
P320,000
Required capital balances based on
on profit and loss ratio
128,000
112,000
80,000
320,000
Cash received (paid)
(P 8,000)
(P 12,000)
P 20,000
Journal entry on the partnership books

Duenas, Capital 20,000
Benito, Capital
Cabral, Capital
8,000
12,000
2.
Benito Cabral Duenas Total
Capital balances before additional
cash investment P120,000
P100,000
P100,000
P320,000
Required capital balances based on
lowest possible cash investment*
160,000
140,000
100,00
0
400,000
Required additional cash investment
P 40,000
P 40,000
P 80,000
* P120,000/40% = P300,000; P100,000/35% = P285,174; P100,000/25% = P40
0,000
Journal entry on the partnership books
Cash
80,000
Benito, Capital
Cabral, Capital
40,000
40,000
3.
Benito
Cabral
Capital balances
P120,000
Required capital
120,000
0
Additional investment(withdrawals)
00)
P 20,000
Duenas
P100,000
105,000
Total
P100,000
75,000
P320,000
300,00
5,000
(P 25,0
--------
Duenas, Capital 25,000

Cash
20,000
Cabral, Capital
5,000
Exercise 1
12
Enriquez and Flores
Schedule Showing Adjustments in Capital
Reported net profit
P400,000
Adjustments:
Equipment purchased charged to expense
200,000
Depreciation on equipment
( 20,000)
Overstatement of 2008 ending inventory
( 24,000)
P156,000
Corrected net profit
x 65%
P501,400
101,400
Distribution of 2008 net profit

Enriquez
Flores
Total
Salaries P120,000
P120,000
P240,000
Interest
30,000
45,000
75,000
Balance
51,000
34,000
85,000
P201,000
P199,000
P400,000
Distribution of 2008 corrected net profit
Salaries P120,000
P120,000
P240,000
Interest
30,000
45,000
75,000
Balance
111,840
74,560
186,400
P261,840
P239,560
P501,400
Adjustments
P 60,840
P 40,560
P101,400
2.
Equipment
200,000
Enriquez, Capital
60,840
Flores, Capital
40,560
20,000
Inventory
24,000
Income Tax Payable
54,600
PROBLEMS
Problem 1
1.
a.
1
Merchandise, Inventory 60,000
Ruiz, Capital
b.
60,000
Ruiz, Capital 30,000

c.
Interest Receivable
1,500
Ruiz, Capital
1,500
P150,000 x 6% x 2/12 = P1,500
d.
Ruiz, Capital 7,500

Interest Payable
7,500
P300,000 x 10% x 3/12 = P7,500
e.
Ruiz, Capital 60,000
f.
g.
Office Supplies 5,000

Ruiz, Capital
Cash
524,500
Santos, Capital
30,000
180,000
240,000
5,000
524,500
Ruiz and Santos

Statement of Financial Position
December 1, 2008
Assets
Cash
P
764,500
Notes Receivable
150,000
Accounts Receivable
P900,000
Less Allowance for Uncollectible Accounts
90,000
Interest Receivable
1,500
Merchandise Inventory
300,000
Office Supplies
5,000
480,000
Total Assets
P2,511,000
Liabilities and Capital
Notes Payable P300,000
Accounts Payable
630,000
Interest Payable
7,500
Total Liabilities
P 937,500
Ruiz, Capital P1,049,000
Santos, Capital
524,500
Total Capital
1,573,500
Total Liabilities and Capital
P2,511,000
810,000
Problem 1-2
1.
2.
Cash
518,000
Merchandise Inventory
Tomas, Capital
1,152,000
1,670,000
Accounts Receivable
1,792,000
Office Equipment
160,000
Goodwill
198,000
Accounts Payable
576,000
160,000
Vicente, Capital
1,670,000
Tomas and Vicente

June 1, 2008
Assets
Cash
P
518,000
Accounts Receivable
P1,792,000
Less Allowance for Uncollectible Accounts
160,000
Inventories
1,408,000
Office Equipment
160,000
Goodwill
198,000
Total Assets
P3,916,000
Liabilities and Capital
Accounts Payable
P 576,000
Tomas, Capital P1,670,000
Vicente, Capital
1,670,000
3,340,000
P3,916,000
Problem 1
1.

Goodwill
3,000
900
Equipment
2,000
Rosas, Capital
3,900
Cash
5,000
Accounts Receivable
46,000
Equipment
12,000
Furniture and Fixtures 9,000
Goodwill
3,000
Accounts Payable
54,000
Perlas, Capital
125,000
2.
1,632,000
Cash
5,000
Accounts Receivable
46,000
Equipment
12,000
Furniture and Fixtures 9,000
Goodwill
3,000
Accounts Payable
54,000
Perlas, Capital
125,000
Cash
7,000
Accounts Receivable
49,000
Equipment
7,000
Goodwill
3,000
Accounts Payable
36,000
Rosas, Capital
100,000
Problem 1 4
1.
Cash
900,000
1,000
4,000
4,000
5,000
Inventories
1,500,000
Equipment
3,000,000
Notes Payable
Serrano, Capital
Cash
600,000
Land
6,000,000
Mortgage Payable
Torres, Capital
1,050,000
4,350,000
1,950,000
4,650,000
Torres, Capital 150,000

Serrano, Capital
150,000
Purchases
900,000
Accounts Payable
900,000
Accounts Payable
Cash
720,000
720,000
Mortgage Payable
Interest Expense
Cash
300,000
120,000
420,000
Notes Payable 225,000

Interest Expense
75,000
Cash
300,000
Accounts Receivable
Sales
Cash
3,450,000
3,450,000
3,150,000
Accounts Receivable
3,150,000
Selling and General Expenses

870,000
Cash
630,000
150,000
Accrued expenses
90,000
Serrano, Drawing
351,000
Torres, Drawing 351,000
Cash
702,000
Income Tax
204,750
Income Tax Payable
204,750
Inventories, end
600,000
Sales 3,450,000
Inventories, beginning
1,500,000
Purchases
900,000
870,000
Interest Expense
195,000
Income Tax
204,750
Income Summary
380,250
Serrano, Capital
Torres, Capital
192,150
188,100
Serrano Torres Total

Interest on beginning capital
P180,000
P180,000
P360,000
Salaries
Remainder
150,000
60%, 40%
100,000
( 137,850)
250,000
( 91,900)
( 229,750)
Net Profit
P192,150
P188,100
P380,250
Serrano, Capital
351,000
Torres, Capital 351,000
Serrano, Drawing
351,000
Torres, Drawing
351,000
Serrano and Torres Partnership
Statement of Recognized Income and Expenses
Sales
P3,450,000
Cost of Goods Sold:
Inventories, beginning
P1,500,000
Purchases
900,000
Cost of Goods Available for Sale P2,400,000
Less Inventories, end
600,000
1,800,000
Gross Profit
P1,650,000
870,000
Operating Income
P 780,000
Interest Expense
195,000
Net Profit before Income Tax
P 585,000
Income Tax
204,750
Net Profit
P 380,250
Serrano and Torres Partnership
December 31, 2008
Assets
Current Assets:
Cash
P1,878,000
Accounts Receivable (P3,450,000 P3,150,000)
Inventories
600,000
P 2,778,000
Property, Plant and Equipment:
Land
P6,000,000
Equipment P3,000,000
Less Accumulated Depreciation
150,000
50,000
Total Assets
P11,628,000
Liabilities
Current Liabilities:
Accounts Payable (P900,000
P720,000)
Accrued Expenses
90,000
Income Tax Payable
204,750 P
474,750
Long-term Liabilities:
Notes Payable (P1,050,000 P225,000)
Mortgage Payable (P1,950,000
P300,000)
5,000
Total Liabilities
P 2,949,750
Capital
Serrano, Capital
P4,341,150
300,000
2,850,000
8,8
P180,000
P 825,000
1,650,000
2,47
Torres, Capital
4,337,100
Total Capital
8,678,250
P11,628,000
Problem 1 - 5
1. P2,700,000 (P200,000 + P1,100,000 + P500,000 + P1,500,000
,000)
2 P2,600,000. (P2,500,000 + P2,700,000) / 2 = P2,600,000
Problem 1
P600,000 = P2,700
1.

Bernabe, Capital
505,800
Burgos, Capital
194,200
Bernabe
Burgos
Total
Interest on beg. capital
P 28,800
P
35,200
Balance 3:1
477,000
159,000
636,000
Net Profit
P 505,800
P
194,200
P700 000
P 64,000
2.

Bernabe, Capital
284,000
Burgos, Capital
416,000
Bernabe
Burgos
Total
Salaries
P 140,000
P
260,000
P400,000
Interest on end capital
48,000
60,000 P108,000
Balance Equally
96,000
96,000
96,000
Net Profit
P 284,000
P
416,000
P700 000
3.

Bernabe, Capital
Burgos, Capital
Bernabe
Burgos
Salaries
P 90,000
P
Interest on average. cap
Balance 3:1
255,150
Net Profit
P 394,150
P
394,150
305,850
Total
170,000
P260,000
49,000
50,800
85,050
340,200
305,850
P700 000
99,800
Bernabe:
Jan. 1 May 31 P360,000 x 5
P1,800,000
June 1 Oct. 31
460,000 x 5 2,300,000
Nov, 1 Dec. 31
400,000 x 2 800,000
P4,900,000/12 P408,333
Burgos:
Jan. 1
July 1
Nov.1
June 30
Oct. 31
Dec. 31
P440,000 x 6
P2,640,000
360,000 x 4 1,440,000
500,000 x 2 1,000,000
P5,080,000/12 P423,333
4.

Bernabe, Capital
Burgos, Capital
Bernabe
Burgos
Salaries
P 100,000
P
Interest on average. cap
Balance 40%, 60%
126,734
Net Profit
P 267,567
P
5.
267,567
432,433
Total
200,000
P300,000
40,833
42,333
190,100
316,834
432,433
P700 000
83,166
Bernabe, Capital
329,360
Burgos, Capital
370,640
Bernabe
Burgos
Total
Salaries
P 100,000
P
100,000
P220,000
Interest on beg. cap
28,800
35,200
Bonus
43,600
43,600
Balance
2:3
156,960
235,440
392,400
Net Profit
P 329,360
P
370,640
P700 000
B = 10%(NI S I)
Problem 1
64,000
Sandy Tammy Manny Total

1.
6% interest on capital P 16,800
P 12,000
P
7,200
P 36,000
Salaries
48,000
40,000
88,000
Balance
5:3:2 ( 74,500)
( 44,700)
( 29,800)
(149,00
0)
Net Profit
P(57,700)
P 15,300
P 17,400
P(25,000
)
2.
P 12,000
P
7,200
P 36,000
Salaries
48,000
40,000
88,000
Balance 5:3:2 ( 32,000)
( 19,200)
( 12,800)
( 64,0
00)
Net Profit
P( 15,200)
P 40,800
P 34,400
P 60,00
0
3.
P 12,000
P
7,200
P 36,000
Salaries
48,000
40,000
88,000
Bonus
13,500
13,500
Balance 5:3:2
56,250
33,750
22,500
112,50
0
Net Profit
P 73,050
P107,250
P 69,700
P250,000
B = (P250,000 P36,000
P88,000
P72,000)25% = P13,500
Problem 1 - 8
1.
Delmar Pilar Total

5% interest on capital
P 2,500
P 1,500
P
4,000
Salaries
12,000
8,000
20,000
20% bonus on net profit
22,100
22,100
Balance capital ratio
40,250
24,150
64,400
Net Profit
P76,850
P33,650
P110,500
2.
Sales
480,000
Cost of Goods Sold
Operating Expenses
Income Taxes
Income Summary
210,000
100,000
59,500
110,500

Delmar, Capital
Pilar, Capital
76,850
33,650
Delmar, Capital 6,000

Pilar, Capital 10,000
Delmar, Drawing
Pilar, Drawing
6,000
10,000
Delmar and Pilar Company

Statement of Changes in Partners Capital
Delmar
Pilar
Total
Capital balances, January 1, 2008
P 50,000
Add Distribution of net income for 2008:
Interests
P
2,500
P 1,500
Salaries
12,000
8,000
Bonus
22,100
22,100
Balance - capital ratio
40,250
00
Total share in net profit
P 76,850
Total P126,850
P63,650 P190,500
Less Drawings
6,000
10,000
Capital balances, December 31, 2008
P120,850
P30,000 P 80,000
P
4,000
20,000
24,150
64,4
P33,650 P110,500
16,000
P53,650 P174,500
Problem 1 - 9
Ramos, Gonzales and Martinez
Statement of Changes in Partners Capital
For Three Years Ended December 31, 2008
Ramos
Gonzales
Martinez
Total
Capital, January 1, 2006
P 80,000
P 48,000
P 40,000
P 168,000
Distribution of net loss (Sch. 1)
( 2,000)
( 1,520)
( 2,0
00)
( 5,520)
Withdrawals
(12,000)
(14,480)
(16,000)
(42,480)
Capital, December 31, 2006
P 66,000
P 32,000
P 22,000
P120,000
Distribution of net profit (Sch. 2)
7,960
8,320
7,72
0
24,000
Withdrawals
(13,960)
(16,320)
(17,720)
(48,000)
P 60,000
P 24,000
P12,000 P 96,000
Distribution of net profit (Sch. 3)
21,840
18,840
18,120
58,800
Withdrawals
(20,400)
(24,000)
(21,200)
(65,600)
P 61,440
P 18,840
P 8,920
P 89,200
Schedule 1 - Distribution of 2006 net loss
Ramos
Gonzales
Martinez
Total
P 9,600
P 12,000
P 12,000
P 33,60
0
Interest of 6% on beg. Capital
4,800
2,880
2,400
10,080
Balance equally
(16,400)
(16,400)
(16,400)
P 49,200
Net income
P( 2,000)
P( 1,520)
P( 2,000)
P( 5,520)
Schedule 2 - Distribution of 2007 net profit
Ramos
Gonzales
Martinez
Total
P 9,600
P 12,000
P 12,000
P 33,60
0
3,960
1,920
1,320
7,200
Balance
equally
( 5,600)
( 5,600)
( 5,600)
(16,800)
Net income
P
7,960
P
8,320
P
7,720
P 24,000
Schedule 3 - Distribution of 2008 net profit
Ramos
Gonzales
Martinez
Total
P 9,600
P 12,000
P 12,000
P 33,60
0
3,600
1,440
720
5,760
Bonus - 20% (P58,800 - P39,360 - B)
3,240
3,
240
Balance equally
5,400
5,400
5,400
16,200
Net income
21,840
18,840
18,120
58,800
Problem 1 -10
Robles, Bernal and Reyes
Statement of Partners Capital
Robles
Bernal
Reyes
Capital balances before closing
the nominal accounts
P120,000
P ( 2,000)
P20,000
P138,000
Add Distribution of net profit:
Drawing allowance
20,000 14,000 10,000
Interest on average capital 7,200 240
Balance - 60%, 30%, 10%
58,800 29,400
Total P206,000
P41,640 P40,360 P288,000
Deduct Cash distribution
122,720
26,480
P 83,280
P41,640
Total
44,000
560
8,000
9,800 98,000
149,200
P13,880 P138,800
P206,000 / 60% = P343,333;

P40,360 / 10% = P403,600
P41,640 / 30% = P138,800 (required total capital)
Problem 1 - 11
Chavez, Roman, and Valdez
Statement of Changes in Partners
January 1 to November 1, 2008
Chavez
Loan
Chavez
Capital Roman
Capital Valdez
Capital
Total
Capital
Beginning balances
P 80,000
P 80,000
P 80,000
P240,000
Loan from Chavez
P 60,000
60,000
Transfer of equipment to Valdez
( 16,000)
( 16,0
00)
Balances
P 60,000
P 80,000
P 80,000
P 64,000
P284,000
Distribution of loss on realization*
Salary to Valdez
24,000
24,000
Int. to Chavez for 7 months
2,100
2,100
Balance divided equally*
( 76,700)
( 76,700)
( 76,7
00)
( 230,100)
Balances
P 60,000
P
5,400
P
3,300
P 11,300
P 80,000
Dist. of cash in final settlement
60,000
5,400
3,
300
11,300
80,000
*Total partners equity as shown above
Less Cash available for distribution
Loss on realization
Less Salary and interest
Total loss to be divided equally
P284,000
80,000
P204,000
26,100
P230,100
Problem 1 - 12
Canlas, David, Estrella and Fajardo
Statement of Changes in Partners Capital Accounts
Canlas
David Estrella
Fajardo
Total
Investment
P309,000
P159,000
P327,000
------- P 795,
000
Net profit
237,700 186,230 140,310 P 24,010
588,250
Total P546,700
P345,230
P467,310
P 24,010
P1,383,2
50
Less: Excess rent (P225 x 6)
P 13,500
P
13
,500
Withdrawals
P 78,000
P 66,000
87,000 P 37,500
268,500
Uncollectible accounts 18,000 6,750
24,750
P 96,000
P 72,750
P100,500
P 37,500
P 306,
750
Capital, December 31
P450,700
P272,480
P366,810
P(13,490
)
P1,076,500
Supporting computations:
Revenue from fees
P 900,000
Expenses:
Total expenses, excluding depreciation and uncollectible
accounts (P290,000 - P13,500)
P 276,500
Depreciation [(P195,000 x 10%) + (P75,000 x 5%)
23,250
Doubtful accounts (P24,000 x 50%)
12,000
311,750
Net profit
P588,250
Distribution of net income

Canlas
David Estrella
20% of gross fees from respective
clients
P 66,000
P 36,000
P 33,000
P135,000
20% of fees after April 1 after
expenses but before bad debts
P24,010*
24,010
Balance -Canlas-40%, David-35%,
Estrella-25%
171,700
150,230
107,310
429,240
Total P237,700
P186,230
P140,310
Fajardo
Total
P24,010 P588,250
After April 1
Revenues
P 180,000
Expenses before uncollectible accounts (P276,500 + P23,250) x 180 / 900
50
P120,050
20%
Share of Fajardo
P 24,010
59,9
Problem 1-13
1.
Equipment
13,500
Profit and Loss
1,350
12,150
2.
Profit and Loss 4,375

Interest Payable
4,375
P87,500 x 6% x 10/12 = P4,375
3.
Profit and Loss 159,025

Abaya, Capital
63,700
Reyes, Capital
95,505
Abaya Reyes Total
Salaries P 39,000
P 58,500
Bonus [25% x (NI
B
S) ]
Balance
equally
24,610
Total
P 63,610
P 95,415
4.
P 97,500
12,305
24,610
P159,025
12,305
49,220
Abaya, Capital 36,000

Reyes, Capital
62,500
Abaya, Drawing
36,000
Reyes, Drawing
62,500
Problem 1-14
1.
Jaime = 5/10 x 80% = 40%

Madrid = 3/10 x 80% = 24%
Soriano = 2/10 x 80% = 16%

Matias = 20%
2.
Corrected net income = P250,000
000 x 65%) = P240,250
(P12,000
P31,000
P20,000 + P15,000 + P9,
Jaime = P240,250 x 40% = P96,100

Soriano = P240,250 x 16% = P38,440
Madrid = P240,250 x 24% = P57,660
Matias = P240,250 x 20% = P48,
050
MULTIPLE CHOICE
1.
2.
3.
4.
Total
(40%)
D
D
A
C
Abena (60%)
Abena
Buendia
MV
Cost
(P90,000
P60,000) P30,000 P18,000
P12,000
00)
Buendia
MV Cost (P60,000
4,000)
Actual P20,000 P12,000
Inequity
( 20,000)
P 0 (P18,000)
P70,000)
( 10,000)
P 8,000
( 30,000)
P18,000
5.
6.
7.
8.
A
C
B
B
9.
Roxas = P596,250 - P5,550 = P590,700

Bernardo = P335,000 - P4,050 - P9,000 = P321,950
10.
Roxas = (P590,700 + P321,950) x 60% = P547,590

Bernardo = (P590,700 + P321,950) x 40% = P365,060
Molina s contribution (P190,000

P60,000)
Nuevo s tangible contribution
100,000
Total capital contributions
P230,000
x
60%
Capital credit of Molina
P 138,000
Contribution of Molina
130,000
Bonus to Molina P
8,000
10,000
P130,000
11.
Roxas = P650,000
P590,700 = P59,300
Bernardo = P400,000
P321,950 = P78,050
12.
Bruno = P150,000 - P90,000 = P60,000
13.
Total assets = Total liab. + Total capital

= P25,000 + P300,000 = P325,000
14.
Cash contribution = (P248,850 x 1/3)
15
Total capital = (P158,400 + P17,500
16.
Required capital of Esteban (P287,500 x 60%)

Non-cash contributions of Esteban (P125,000
Cash contribution
P 77,500
17.
P50,000 = P32,950
P5,000
P5,000) 2/3 = P248,850

P172,500
P30,000)
Contribution of Diaz
P115,000
Contribution of Esteban (P125,000 P30,000 + P50,000)
Total partnership capital
P260,000
95,000
145,000
6,0
18.
P115,000 + P95,000 = P210,000/2
P105,000
19.
Net increase (decrease) in capital

(P120,000)
Add Withdrawals
260,000
Total (P140,000)
Less Additional investments
50,000
Profit share
P 90,000
Profit share percentage
30%
Total partnership net profit
P300,000
20.
21.
22.
0
C
B
C
Net profit (exclusive of salary, interest and bonus)
P 93,50
Salary (P2,000 x 12)

24,000
Interest (P50,000 x 5%)
2,500
Net profit after deduction of bonus
P120,000
Bonus = .20 (P120,000 + Bonus) = P24,000 + .20 Bonus
= P24,000/.80 = P30,000
23.
24.
P
D
C
Alberto Bustos Cancio Total

10% x P1,000,000
P 100,000
100,000
20% x P1,500,000
300,000
300,000
5% (P1M
P400,000)
Balance
equally
P30,000 P30,000
0,000
0
680,000
680,000
680,00
2,040,000
Net income
25.
Ramos
Interest
P1,080,000
Campos Ocampo Total

P24,000 P12,000
P 8,000
P 44,00
0
Salaries
60,000
40,000
100,00
0
Balance
equally
( 70,000)
(70,000)
( 210,000)
P14,000
26.
Sison Torres Velasco

Bonus - 10%(P44,000 - B)
Total
P 4,000
P 4,000
Interest on capital
in excess of P100,000
P 1,000
1,000
Balance - 4:4:2 6,800
27.
P10,000
12,000 22,000
6,800 3,400 17,000
P19,400 P44,000

Bonus - 10%(P22,000 - B)
P 2,000
Interest on capital
P 1,000
1,000
Total
P 2,000
( 70,000)
P10,000
12,000 22,000
Balance - 4:4:2 (1,200) (1,200) (600) (3,000)
P13,400 P22,000
28.

Bonus - 10%(P22,000 - B)
Total
P 2,000
P 2,000
Interest on capital
P 1,000
1,000
Balance
Salary ratio P8,636
10,364 19,000
P12,364 P22,000
29.
Average capital of Tamayo

Average capital of Vidal
P100,000 x 6 = P 600,000
P225,000 x 9 = P2,025,000
160,000 x 6 =
960,000
155,000 x 3 =
465,000
P1,560,000/12
P2,490,000/12
P130,000
P207,500
Average capital of Banson - P150,000
Total int. on ave. capital= (P130,000 + P207,500 + P150,000) 10%
= P48,750
30.
Interest on ave. capital

P 48,750
144,000
Balance - divided equally
9,000
P 201,750
31.
B
Total capital before net income
(P475,000 + P60,000
P70,000)
P465,000
Add Net profit
201,750
Total capital, Dec. 31, 2008
P666,750
32.
P
D
16,235
Andal Briones
Camba
Int. on average capital
P 47,250
P 87,350
122,325
Total
23,865
82,625
204,950
8)
Balance - equally
(139,308)
(417,924)
Net increase (decrease) P 30,267
P(125,624)
33.
65%
P25,610
08)
(139,308)
P(115,443)
(139,3
P( 40,44
Net income = Net sales - CGS - Depr. - Oper. exp. Others)

= P228,000 - P123,000 - P7,500 - P58,100 x
Mariano
Lucas
total
Salary to partner for 10 mos. P10,000
P 10,00
0
Bonus to managing partner
1,561
Balance
8,781
1,561
based on orig. cap.
P 5,268
14,049
TOTAL share in profit
P 20,342
P 5,268
P 25,610
34.
0
TOTAL share in profit
P 20,342
Add Capital, beginning
P 5,268
P 25,61
125,000
75,000
200,0
P 80,268
20,000
P 225,610
30,000
50,0
00
TOTAL P145,342
Less Withdrawals
00
Capital, end
35.
D
Total
36.
A
P2,000.00
37.
A
16,000.00
P125,342
Belen
Interest
P12,000.00
Salaries
P 50,268
Lorna
P 175,610
Ursula
P 5,000.00
P 2,500.00
10,000.00
6,000.00
Balance 10,000.00
10,000.00
Edna
P 2,500.00
6,666.67
6,666.67
33,333.34
Add l profit
for Edna
________
________
_________
3,333.33
3,333.33
P12,000.00
38.
Net profit
P64,666.67
P25,000.00
P18,500.00
P9,166.67
Puno
Quirino Romero
Total
Salaries
P40,000 P36,000 P13,650 P 89,650
Bonus
13,000
13,000
Interest
1,000
750
4,600
6,350
Balance
7,000
7,000
00
Total
P61,000 P43,750 P25,200 P130,000
Computation of average capital:

Puno, capital
Jan. 1
P10,000 x 3 P 30,000
Apr 1 9,000 x 3
27,000
July 1 11,000 x 3
33,000
Oct. 1 10,000 x 3
30,000
P120,000 / 12 P10,000
Quirino, capital
Jan. 1 P 6,000 x 6 P 36,000
July 1 10,000 x 3
30,000
Oct. 1 8,000 x 3
24,000
P 90,000 / 12 P 7,500
Romero, capital
Jan. 1
P40,000 x 3
P120,000
7,000
21,0
Apr. 1 - 38,000 x 3
July 1 - 53,000 x 6
P552,00 / 12
P46,000
114,000
318,000
Let X = Net Income

P40,000 + 10% X + P1,000 + 1/3 (X
P89,650
10% X
P6,350 =
P61,000
P40,000
P40,000
10% X +
40% X =
39.
+ 10% X + P1,000 + 1/3 (90% X P96,000) = P61,000

+ 10% X + P1,000 + 30% X P32,000 = P61,000
30% X = P61,000
P40,000
P1,000 + P32,000
P52,000
X = P130,000
Legarda- 5/10 x 80% = 40%

Madrigal-3/10 x 80% = 24%
40.
C
Share of Legarda
= P25,000
0 + P 900 x 65%) = P24,025 x 40% = P9,610
41.
Sotto - 2/10 x 80% = 16%

Pimentel -
( P1,200 - P3,100 - P2,000 + P1,50
Serrano Toledo
2008 Net income
(P50,000 P8,000)
P42,000
Salary to Serrano
( 36,000)
P36,000
Remainder
P 6,000
Divided equally (
6,000)
3,000
P 3,000
Understatement in 2007 NI
Divided 60:40 ( 8,000)
Income allocation
20%
P8,000
4,800
P43,800 P 6,200
3,200

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CHAPTER 1

Partnership Formation and Operations

Campos, Capital 14,000

Campos, Capital 40,000

TOTAL LIABILITIES &

Income Summary 238,000

Income Summary 238,000

Income Summary 238,000

Income Summary 238,000

Income Summary 238,000

Computation of average capital:

Ave. capital (P1,249,200/12)

Ave. capital (P2,888,000/12)

Computation of bonus: P160,000 x 65%= P104,000

P20,686 x 10% = P8,331

Sanchez Gomez Total

Mercado Puzon Total

Mercado Puzon Total

Net profit after salary, interest and bonus

B = .25 x P500,000 = P125,000

B = .25 (P500,000 - Tax)

.25 (P500,000 - B - Tax)

Income Summary 500,000

Journal entry on the partnership books

Duenas, Capital 25,000

Distribution of 2008 net profit

Ruiz, Capital 30,000

Ruiz, Capital 7,500

Office Supplies 5,000

Ruiz and Santos

Tomas and Vicente

Merchandise Inventory 3,000

Torres, Capital 150,000

Notes Payable 225,000

Selling and General Expenses

Serrano Torres Total

Income Summary 700,000

Income Summary 700,000

Income Summary 700,000

Income Summary 700,000

Income Summary 700,000

Sandy Tammy Manny Total

Delmar Pilar Total

Income Summary 110,500

Delmar, Capital 6,000

Delmar and Pilar Company

P206,000 / 60% = P343,333;

Distribution of net income

Profit and Loss 4,375

Profit and Loss 159,025

Abaya, Capital 36,000

Jaime = 5/10 x 80% = 40%

Soriano = 2/10 x 80% = 16%

P20,000 + P15,000 + P9,

Jaime = P240,250 x 40% = P96,100

P60,000) P30,000 P18,000

Roxas = P596,250 - P5,550 = P590,700

Roxas = (P590,700 + P321,950) x 60% = P547,590

Molina s contribution (P190,000

Bruno = P150,000 - P90,000 = P60,000

Total assets = Total liab. + Total capital

Cash contribution = (P248,850 x 1/3)

Total capital = (P158,400 + P17,500