1.1.2.a Assignment - Partnership Formation and Operation

 

1. The business assets and liabilities of John and Paul appear below: Paul

John Cash  Accounts Receivable Receivable Inventories Land Building Furniture and fixtures

11,000.00 234,536.00 120,035.00 603,000.00   -

22,354.00 567,890.00 260,102.00 428,267.00 34,789.00

50,345.00

Other Assets Total

2,000.00   1,0 1,020 20,9 ,916 16.0 .00 0

3,600.00 1,3 ,31 17, 7,0 002. 2.0 00

 Accounts Payable Payable Notes Payable John, Capital Paul, Capital Total

  178,940.00 17   200,000.00 20   641,976.00    1, 1,0 020 20,9 ,916 16.0 .00 0

243,6 ,65 50.0 .00 0 345,0 ,00 00.0 .00 0 728,352.00 1,3 ,31 17, 7,0 002. 2.0 00

John and Paul agreed to form a partnership contributing their respective assets and equities a. Accounts receivable of P20,000 in John's books and P35,000 in Paul's are uncollectible. b. Inventories of P5,500 and P6,700 are worthless in John's and Paul's respective books. c. Other assets of P2,000 and P3,600 in John's and Paul's respective respective books are to be written off. The capital account of the partners after the adjustments will be: 5 ts

 

John  

Paul 11,000.00 214,536.00 114,535.00 603,000.00

22,354.00 532,890.00 253,402.00

50,345.00

428,267.00 34,789.00

993,416.00

1,271,702.00

178,940.00 200,000.00 614,476.00 -

243,650.00 345,000.00 683,052.00

993,416.00

1,271,702.00

subject to tthe he following adjustments:

 

2. Aldo, Bert, and Chris formed a partnership on April 30, with the following assets, measured at their fair values, contributed by each partner:

Aldo

 Be  B ert

Chris

Aldo

Bert

Cash

  10,000.00

 

12,000.00

  30,000.00

10,000.00

12,000.00

Delivery trucks

  150,000.00

 

28,000.00

-

60,000.00

28,000.00

Computers

  8,500.00

 

5,100.00

-

8,500.00

5,100.00

Oce furniture

 -

3,500.00

2,500.00

  168,500.00

 

48,600.00

32,500.00

3,500.00 78,500.00 25,300.00 -

48,600.00 4,600.00

Although Chris has contributed the most cash to the partnership, he did not have the full amount of P30,000 available available and was forced to borrow P20,000. The delivery truck contributed by Aldo has a mortgage of P90,00 P90,000 0 and the partnership is to assume responsibility responsibili ty of the loan. The partners agreed to equalize their interest. Cash setlemen among he parners are o be made ouside he parnership. Using the Bonus Method, choose the correct answer and show your soluon. 5pts

a. Bert and Chris should pay Aldo, P4,600 and P20,700 respecvely. b. Aldo should pay Bert and Chris, P25,300. c. Bert should pay Aldo, P25,300 and Chris, P20,700. d. Chris should pay Aldo, P25,300 and Bert, P4,600.

 

Chris   30,000.00

2,500.00 32,500.00 - 20,700.00

159,600.00

53,200.00

 

3. Cong and Viy have just formed a partnership. Cong contributed cash of P126,000 and computer equipment that cost P54,000. The computer had been used in his sole proprietorship and had been depreciated to P24,000. The fair value of the equipment is P36,000. Cong also contributed a note payable of P12,000 to be assumed b y the partnership. Cong is to have 60% interest in the partnership. p artnership. Viy contributed only P90,000 cash.

Cong should make an addional investment (withdrawal) of: 5pts

Cong Cash FV - Equip

Viy

126000 36000

90000

162000 Note Payable Capital

12000 150000

90000

144000

96000

6000

-6000

240000

Cong should withdraw 6,000 from his inial contribuon while Viy should make an addional investment of 6,0

 

 

0

 

JJ and KK are partners who share prots and losses in the rao of 60%: 40%, respecvely. respecvely. JJ's salary is P60,000 and P30,000 P30,000 fo partners are also also paid interest on their their average capital capital balances. In 2019, 2019, JJ received received P30,000 of interest and KK, KK, P12,000. P12,000. The pro allocaon allocao n is determined aer deducons for the salary and interest payments. If KK's share in the residual income (income aer

salaries and interest) was P60,000 in 2019, what was the total partnership income? 5pts 60% JJ

40% KK

Total

Salaries

60,000.00

30,000.00

90,000.00

Interest

30,000.00

12,000.00

42,000.00

Re Ressidua iduall Inco Income me

90 90,0 ,000 00.0 .00 0

60 60,0 ,000 00.0 .00 0

15 150, 0,00 000. 0.00 00 282,000.00

 

 

KK. The t and loss educng

 

HH,, MM, and AA AA formed formed a partnershi partnership p on January January 1, 2020, 2020, and and contributed contributed P150,0 P150,000, 00, P200, P200,000 000,, and P250,0 P250,000, 00, respec respec  5. HH be shared among the partners as follows: salary, P24,000 for HH, P18,000 for MM, and P12,000 for AA; interest of 12% on remainder in the rao of 2:4:4, respecvely.

The operang income for the year ending December 31, 2020 amounted to P176,000. HH contributed addional capital of contributed addional capital capital of P20,000 P20,000 on August 1 and made a drawing of P10,000 P10,000 on October October 1; and AA made a drawin

The partners' capital balances on December 31, 2020 are: 10 pts

2 HH

4 MM

4 AA

  150,000.00

200,000.00

Addi Addio ona nall Capit apital al

30 30,0 ,000 00.0 .00 0

20 20,,00 000. 0.00 00

Net Income

53,180.00

62,060.00

60,760.00

Drawings

  233,180.00

282,060.00

310,760.00

Weighted

10,000.00

10 1 0,000.00

30 30,000.00

223, 3,1 180. 80.00

272 72,,060 060.00 .00

280, 0,7 760. 60.00

Drawings Capital Balances ces

250,000.00

Beginning Balance Addi Addio on nal Inv. Inv.

Beginning Balance Addional Inv. Drawings Weighted

Beginning Balance Addional Inv. Drawings Weighted HH

MM

AA

Amount being allocated

T ot a l 176,000.00

Salaries

24,000.00

18,000.00

12,000.00

54,000.00

Inte Intere resst on wei eigh ghte ted d aver averag age e

19 19,,50 500. 0.00 00

24 24,,70 700. 0.00 00

29 29,4 ,400 00.0 .00 0

73 73,6 ,600 00.0 .00 0

Allocaon of remaining 48,400.00

9,680.00 53,180.00

1 9, 9,360.00 62,060.00

19,360.00 60,760.00

48,400.00 176,000.00

 

ely. Their arcles of co-partnership provide that the operang income the average capital during 2020 of the three partners; and the

P30,000 on July 1 and made a drawing of P10,000 on October1; MM g of P30,000 on November 1.

HH Balances ces

Months ou outstanding Weight ghted Average

  150,000. 150,000.00 00 30,000.00 10,000.00 10,000.0 0

12

150,000. 150,000.00 00

6

15,000.00

3

2,500. 2,500.00 00 162,500.00

MM Balances ces

Months ou outstanding Weight ghted Average

  200,000. 200,000.00 00 20,000.00 10,000.00 10,000.0 0

12 5 3

200,000. 200,000.00 00 8,333.33 2,500. 2,500.00 00 205,833.33

AA Balances ces

Months ou outstanding Weight ghted Average

  250,000. 250,000.00 00

12

30,000.00 30,000.0 0

250,000. 250,000.00 00 -

2

5,000. 5,000.00 00 245,000.00

 

6. On January 2, 2020, Berlin and Oslo formed a partnership. Berlin contributed capital of P175,000 and Oslo, P25,000. They agreed to share prots and losses 80% and 20%, respecvely. Oslo is the general manager and works in the partnership full me and is given a salary of P5,000 a month; an interest of 5% of the beginning capital (of both partner) and a bonus of 15% of net income before before the  the salary, interest and the bonus.

The prot and loss statement of the partnership for the year ended December 31, 2020 is as follows:

Net Sales

  875,000.00

Cost of goods sold

700,000.00

Gross prot

  175,000.00

Expenses (including the salary, interest and the bonus)

143,000.00

Net Income

  32,000.00

The amount of bonus to Oslo in 2020 amounted to: 5pts

 

80% Berlin Capi Capita tall Salary

175, 175,00 000. 0.00 00

20% Oslo 25,0 25,000 00.0 .00 0 5,000.00

Total

In Inte teres restt

8,75 8,750.0 0.00 0

1,25 1,250.0 0.00 0

1 10, 0,00 000.0 0.00 0

Prot aer salary

32,000.00

Annual salary

60,000.00

Interest on capital

10,000.00

Prot before annual salary and interest but aer bonus

102,000.00

Prot before annual salary and interest but aer bonus

102,000.00

Divide by

0.85

Prot before salary, bonus, int Bonus rate

120,000 00..00 0.15

Bonus

18,000.00

 

7. Ay, Bee, and Ci are partners in an accounng rm. Their capital account balances at year-end were Ay P90,000; Bee P110,000; and Ci P50,000. They share prots and losses on a 4:4:2 rao, aer the following special terms:

1. Partner Ci is to receive a bonus of 10% of net income aer the bonus. 2. Interests of 10% shall be paid on that poron of a partner's capital in excess of P100,000. 3. Salaries of P10,000 and P12,000 shall be paid to partners Ay & Ci respecvely.  Assuming a net income of P44,000 for the year, the total prot share of Partner Ci was: 5pts

4 Ay Capital Balances Salaries Net income

4 Bee

2 Ci

Total

Prot

90,000.00

110,000.00

5 50 0,000.00

250,000.00

Monthly s

10,000.00 135,600.00

16,600.00

12,000.00 15 155,800.00

22,000.00

Proy befo

Amount b Salaries Bonus Interest Allocaon Ay

Bee

Ci

Total

Amount being allocated

44000

Salaries

10,000.00

Bonus Interest

12,000.00

22,000.00

4,000.00

4,000.00

1,000.00

Allocaon

6,800.00 16,800.00

6,800.00 7,800.00

1,000.00 3,400.00 19,400.00

 

44000  

 

laries

264,000.00

re salaries

308,000.00

ing allocated

Ay

Bee

120,000.00 of remaining

15,600.00

Ci

Total 308,000.00

144,000.00

264,000.00

4,000.00

4,000.00

1,000.00 15,600.00

1,000.00 7,800.00

39,000.00

17,000.00

135,600.00

16,600.00

155,800.00