3.14 Cue and Peed entered into a partnership on March 1, 200A. Theyagreed that Cue, the managing partner was to receive a salaryallowance ofP 24,000 per year and a bonus of 10% of the net profitafter the salary allowance but before the bonus. The balance is to be distributed in the ratio of their initial capital. Selected ledgeraccounts on December 31, 200A prior to adjustments showed thefollowing balances:SalesP 300,0003,000180,00048,000200,00020,000100,00010,000Sales ReturnsPurchasesOperating ExpensesCue CapitalCue DrawingPeed CapitalPeed DrawingInventories at year-end were as follows: Officesupplies, P 810 and merchandise, P 50,000. Prepaid insurance ofP 1,200 and accrued expenses of P 400 are to be recognized.Depreciation of P 4,000 is to be provided.REQUIRED: Prepare the Statement of Partners ' Equity for the 10-month period ended December 31, 200A.

Partner’s equity represents the capital investments made by the partner, drawings made by the…

3.14 Cue and Peed entered into a partnership on March 1, 200A. They agreed that Cue, the managing partner was to receive a salary allowance of P 24,000 per year and a bonus of 10% of the net profit after the salary allowance but before the bonus. The balance is to b e distributed in the ratio of their initial capital. Selected ledger accounts on December 31, 200A prior to adjustments showed the following balances: Sales P 300,000 3,000 180,000 48,000 200,000 20,000 Sales Returns Purchases Operating Expenses Cue Capital Cue Drawing Peed Capital Peed Drawing Inventories at year-end were as follows: Office 100,000 10,000 supplies, P 810 and merchandise, P 50,000. Prepaid insurance of P 1,200 and accrued expenses of P 400 are to be recognized. Depreciation of P 4,000 is to be provided. REQUIRED: Prepare the Statement of Partners'Equity for the 10- omoun month period ended December 31, 200A.

3.14 Cue and Peed entered into a partnership on March 1, 200A. They agreed that Cue, the managing partner was to receive a salary allowance of P 24,000 per year and a bonus of 10% of the net profit after the salary allowance but before the bonus. The balance is to b e distributed in the ratio of their initial capital. Selected ledger accounts on December 31, 200A prior to adjustments showed the following balances: Sales P 300,000 3,000 180,000 48,000 200,000 20,000 Sales Returns Purchases Operating Expenses Cue Capital Cue Drawing Peed Capital Peed Drawing Inventories at year-end were as follows: Office 100,000 10,000 supplies, P 810 and merchandise, P 50,000. Prepaid insurance of P 1,200 and accrued expenses of P 400 are to be recognized. Depreciation of P 4,000 is to be provided. REQUIRED: Prepare the Statement of Partners'Equity for the 10- omoun month period ended December 31, 200A.

Financial Accounting

14th Edition

ISBN:9781305088436

Author:Carl Warren, Jim Reeve, Jonathan Duchac

Publisher:Carl Warren, Jim Reeve, Jonathan Duchac

Chapter12: Accounting For Partnerships And Limited Liability Companies

Section: Chapter Questions

Problem 9E

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M, N, and 0 formed a partnership on January 1, 200A with 3.7 investments of P 40,000, P 24,000 and P 20,000, respectively. The partners agreed to the following distribution of profits: Annual salaries allowed: М, Р 4,800; N, P 6,000; 0, Р 6,000 5% interest on the beginning capital. M, the managing partner is allowed a bonus of 20% of the net profit after treating as expenses the partners' salaries, interest, and bonus. Profits after the allowances are to be divided 3:3:4, for M, N, and O, respectively. For the year 200A, the net profit before interest, salaries, and bonus amounted to P 29,400. Cash withdrawals made were M, P 10,200; N, P 12,000; and O, P 10,600. REQUIRED: Prepare a Statement of Partners' Equity for the year ended December 31, 200A.
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