Exercise 3-5. Distribution of net income by providing salaries, interest and bonus The beginning capital contributions of the partners in the newly formed partnership are as follows: Clara, P250,000; Mara, P150,000; and Angela, P200,000. In its first nine months of operation, the partnership of Clara, Mara and Angela made a net income of P290,000, before providing for 20% annual interest on beginning capital balances and monthly salary allowance of P10,000, P5,000, and P2,500, respectively. Mara is entitled to a 25% bonus on net income after interest and salaries. Any remainder will be shared by the partners in the ratio of 5:3:2. Required: Compute for the share of Clara, Mara and Angela in the partnership profits.
Q: Pyle Garage 629 Main Street HAZARD, GA 30321 Beginning balance 3/1/Year 2 Total deposits and other…
A: The bank reconciliation statement is prepared to equate the balances of cash book and pass book with…
Q: Exercise 11-37 (Static) Cost Allocation: Reciprocal Method (LO 11-4) Bens Corporation has three…
A: The various methods for cost allocation are direct, step method, reciprocal method. Using reciprocal…
Q: 5. Inventory purchase and sales data are as follows. [Note: There was no inventory before the…
A: Formula is Average cost = Total average purchases
Q: Globally, there are variations in business laws, criminal laws and so forth. Such international…
A: The question of whether it makes sense to expect global uniformity in accounting standards is a…
Q: Question 6 Flyzopen Limited had a $900 credit balance in Allowance for Doubtful Accounts at December…
A: JOURNAL ENTRY Journal Entry is the First stage of Accounting Process. Journal Entry is the Process…
Q: C. ABC Company has 3 stores. The following data were made available in March 20X3: Sales Variable…
A: Segment reporting is the process of identifying and presenting financial information about different…
Q: Book value of common stockholders' equity of FedEx, February 28, 2018 (figures in $ millions) Common…
A: In the case of buyback, the journal entry would be recorded by debiting the treasury stock with the…
Q: Martin Clothing Company is a retail company that sells hiking and other outdoor gear specially made…
A: Budgeting - Budgeting is the process of estimating future operations based on past performance. %…
Q: The local parkland is owned and maintained by the local government council. Questions : Is the…
A: An asset can be defined as any resource that is owned or controlled by an entity and has the…
Q: Lessing Toy and Hobby (LTH) is a chain of hobby and craft stores in the Southeast. LTH operates…
A: Differential revenue and cost show the difference between the revenue and costs of various…
Q: As the Resort's senior internal auditor, you have been given the assignment to do a risk-based audit…
A: A risk-based Internal audits enables the internal auditors to identify risks correctly and allows…
Q: Use the following selected account balances of Delray Manufacturing for the year ended December 31.…
A: Cost of goods manufactured: Cost of goods manufactured is the total cost incurred for producing a…
Q: XPLAIN AND WHAT KIND OF INTERNAL CONTROL NEEDED BY AUDITOR OR AU
A: Role of Auditor is very important in the accounting of the organization and basic duty is keep…
Q: Complete the Table Total Total Unit Selling Total Fixed Variable Variable Price Revenue of Costs…
A: Unit Contribution Margin=Selling Price-Unit Variable Cost Contribution Rate=Unit Contribution…
Q: 1. Estimate both the variable costs per unit and the total monthly fixed costs using the high-low…
A: VARIABLE COST Variable Cost is a cost that varies with the level of output. variable costs include…
Q: On December 31, 20X4, Puzzle Corporation acquired 90 percent of Sunday Incorporated's common stock…
A: Consolidated financial statements are prepared for combining parent company and subsidiary company…
Q: a) The trial balance before adjustment of Jason Donohoe Company reports the following balances:…
A: Accounts receivables means account of those customers to whom business has made credit sales and…
Q: Choose from the following selections the best definition of the Manufacturing Operations process. O…
A: Cost accounting is a mechanism adopted by entities to find out the true cost of a specific service,…
Q: Define incremental cost, opportunity cost, and sunk cost. How do these costs impact decision-making?…
A: Incremental Cost: Incremental cost is the additional cost incurred to produce one additional…
Q: Define and give examples of the following: • Loan application • Break-even analysis • Pro-forma…
A: Loan Application: A loan application is a formal request made by an individual or business entity to…
Q: Estimated Sales Sales Purchases Ending Inventory Administrative Salaries Marketing Expense** Sales…
A: Income statement refers to the statement which is prepared by the business at the end of the period…
Q: Merchandise costing $2,000 is sold for $3,000 on terms 2/30, n/60. If the customer pays within the…
A: Net sales :— It is gross sales less sales return & allowance less sales discount. Gross…
Q: Question 3 Internal control procedures for cash payments requires that: O All cheques to be serially…
A: Internal control refers to the processes, policies, and procedures that an organization implements…
Q: 9. Padilla Group sells inventory for $4,000 cash. The original purchase price for the inventory was…
A: Debit Cash $4,000 Credit Sales Revenue $4,000 Debit Cost of Goods Sold $3,000 Credit Inventory…
Q: 1 Journalize the transactions for Quality Furniture Center during September of the current year. Use…
A: Journal entries are the books of records that are maintained in order to record the transactions…
Q: Company applies following available for November: Standard: Direct labor hours (DLH) per unit…
A: As per the Honor code of Bartleby we are bound to given the answer of first three sub part only,…
Q: 4. Xu Company began business on January 1, 20X1. During 20X1 the firm made the following purchases:…
A: Cost of goods sold=Total cost of goods available for sale-Ending inventory
Q: and their balances as at December 31, 2018, its second year of operation: The books of Laredo…
A: Journal Entry :— It is an act of recording transaction in books of account when transaction…
Q: You have just been hired by FAB Corporation, the manufacturer of a revolutionary new garage door…
A: Activity Variance :— It is the difference between flexible budget and master budget. Spending…
Q: On 1 December, a client paid $50,000 for a service to be performed. The accountant recorded the…
A: Unearned revenue is one of the current liability being incurred in business. It means revenue…
Q: Are the unfavorable variances always bad? Are the favorable variances always good? Why
A: Variance analysis is an important aspect of accounting. In variance analysis we compare the actual…
Q: Use this information about Carmelita Inc. to answer the question that follows. Carmelita Inc. has…
A: The equivalent units are calculated on the basis of the percentage of the work completed during the…
Q: Problem 3 * Dette, Inc. estimates the cost ofits physical inventory at March 31 for use in an int…
A: The net purchases are calculated after adjusting purchase returns, purchase discounts from the gross…
Q: Exercise 8-3 (Algo) Direct Materials Budget [LO8-4] Two grams of musk oil are required for each…
A: Direct Material Budget :— This budget is prepared to estimate the units of direct material needed…
Q: Johnson Corporation has the following inventory items: Market/Unit $22 $25 $48 Item ABU А DR Units…
A: Journal Entry :— It is an act of recording transaction in books of account when transaction…
Q: George Caloz & Frères, located in Grenchen, Switzerland, makes luxury custom watches in small lots.…
A: Total etching cost comprises of total variable cost and total fixed cost. Variable cost per unit is…
Q: The management of Zigby Manufacturing prepared the following balance sheet for March 31. ZIGBY…
A: “Since you have posted a question with multiple sub-parts, we will solve first three sub-parts for…
Q: Eagle Tree Services reports the following amounts on December 31, 2024. Assets Liabilities and…
A: The balance sheet and cash flow statement are different financial statements of the business. The…
Q: Question 9 Accounting provides much information to help managers make economic decisions in their…
A: Decision-making- is one of the crucial processes of management which involves critical thinking on…
Q: Inventory information for Part 311 of Marigold Corp. discloses the following information for the…
A: Under FIFO method, cost of goods sold valued on the prices of oldest purchase whereas ending…
Q: Julia Sims has $46.000 of adjusted gross income and $7,360 of medical expenses. She expects to…
A: Tax deductions are expenses or items that can be subtracted from your taxable income, resulting in a…
Q: Problem 1. How much is the adjusted inventory? * Makati Company is preparing its 2022 financial…
A: Inventory is a complete listing of all merchandise, goods, materials, work-in-process inventory,…
Q: What is the amount of the change in total cash of Rectangle? What is the ending cash amount of…
A: Cash flow statement is a financial statement that shows only cash inflows and cash outflows for a…
Q: EA10. Identify which of the following accounts would not be listed on the company's Post- Closing…
A: A post-closing trial balance is a financial statement that summarizes the balances of all accounts…
Q: Required information Exercise 7-17 (Algo) Record the sale of equipment (LO7-6) [The following…
A: Details given in the question are, Cost of Tractor = $30,000 Useful life = 5 year Residual…
Q: Prepare the following journal entry: Baily Corporation purchased a new Bus for $215,000 and paid 15%…
A: JOURNAL ENTRIES Journal Entry is the First stage of Accounting Process. Journal Entry is the Process…
Q: Problem 10. What is the ending inventory? * JoJo Company used the conservative retail inventory…
A: Inventory refers to the products or items an entity is required to trade so that it can generate…
Q: In accounting for the lump-sum liquidation of a partnership, cash payments to partners after all…
A: Liquidation of partnership deals with Closing or terminating the business of the partnership and…
Q: Question 20 The adjusting entry to adjust for the cost of supplies used during the accounting period…
A: JOURNAL ENTRIES Journal Entry is the First stage of Accounting Process. Journal Entry is the Process…
Q: Cash dividends of $78,312 were declared during the year. Cash dividends payable were $12,000 and…
A: In simple terms, a dividend is a portion of a company's earnings that is distributed to its…
Step by step
Solved in 2 steps
- The partnership of Tatum and Brook shares profits and losses in a 60:40 ratio respectively after Tatum receives a 10,000 salary and Brook receives a 15,000 salary. Prepare a schedule showing how the profit and loss should be divided, assuming the profit or loss for the year is: A. $40,000 B. $25,000 C. ($5,000) In addition, show the resulting entries to each partners capital account. Tatums capital account balance is $50,000 and Brooks is $60,000.Arun and Margot want to admit Tammy as a third partner for their partnership. Their capital balances prior to Tammys admission are $50,000 each. Prepare a schedule showing how the bonus should be divided among the three, assuming the profit or loss agreement will be 1:3 once Tammy has been admitted and her contribution is: A. $20,000 B. $80,000 C. $50,000. In addition, show the resulting journal entries to each of the three partners capital accounts.The partnership of Magda and Sue shares profits and losses in a 50:50 ratio after Mary receives a $7,000 salary and Sue receives a $6,500 salary. Prepare a schedule showing how the profit and loss should be divided, assuming the profit or loss for the year is: A. $10,000 B. $5,000 C. ($12,000) In addition, show the resulting entries to each partners capital account.
- Exercise 3-8. Distribution of Net Income to partners On March 1, 2023 Glenda and Harry formed GH Partnership with initial investment of P800,000 and P1,200,000, respectively. Glenda is appointed as the managing partner. The articles of co-partnership provides that profit or loss shall be distributed accordingly: 10% interest on original capital contribution ratio. Monthly salary of P10,000 and P5,000 respectively for Glenda and Harry. . Glenda shall be entitled to bonus equivalent to 10% of net income after interest, and salary. The remainder shall be distributed in ratio of 4:6 for Glenda and Harry, respectively. ● For the year ended December 31, 2023, the partnership reported net income of P1,000,000. Required: Compute for the share in net income of Glenda for the year ended December 31, 2023.HRM Partnership begins its first year of operations with the following capital balances A, capital P32,000 C, capital 16,000 According to the partnership agreement, all profits will be distributed as follows • A monthly salary of P 3,200 and P 1,600 to A & C respectively. • The partners will be allowed with interest equal to 10% of the capital balances of the first day of the year. A bonus of 10% of the net income after bonus to A. • The remainder will be divided on the basis of the beginning capital for the first year and equally for the second year Each partner is allowed to withdraw up to P 1,600 a year. Assume that the net loss for the first year of operations ions is P2,400 with net income of P 8,800 in the following year. Assume further that each partner withdraws the maximum amount from the business each period. The capital balances of A at the end of the second year is The capital balances of B at the end of the second year isProblem 1. Alucard and Chou organized their partnership on 01/01/19. The following entries were made into their capital accounts during 2019. Required: If partnership profits for the year equaled P66,000, indicate the allocations between the partners under the following independent profit-sharing allocation conditions: Interest of 10% is allocated on weighted average capital balance and the remainder is divided equally. A salary of P9,000 will be allocated to Chou; 10% interest on ending capital is allocated to the partners; remainder is divided 60/40 to Alucard and Chou, respectively. Salaries are allocated to Alucard and Chou in the amount of P10,000 and P15,000, respectively and the remainder is allocated in the proportion to weighted average capital balances. A bonus of 10% of partnership profits after bonus is credited to Alucard, a salary of P35,000 is allocated to Chou, a P20,000 salary is allocated to Alucard, 10% interest on weighted capital is allocated, and remainder is…
- Ange partnership begins its first year of operations with the following capital balances: Ange, Capital P70,000 Bill, Capital P90,000 Cayne, Capital P110,000 The articles of partnership stipulate that profits and losses be assigned in the following manner: Each partner is allocated interest equal to 10% of the beginning capital. Bill is allocated compensation of P2,000 per month. Any remaining profits of losses are allocated on a 4:2:4 basis, respectively. Each partner is allowed to withdraw up to P3,000 cash per year. Assuming that the net income, is 50,000 and that each partner withdraws the maximum amount allowed, what is the balance of the capital of partner Ange at the end of that year?2. Use the following information for the next three cases: The partnership agreement of A, B and C stipulates the following: Partners A and C shall receive annual salaries of P12,000 and P8,000, respectively. DA bonus of 10% of profit after salaries but before deduction of bonus shall be given to Partner A, the managing partner. Each partner shall receive 10% interest on average capital investments. TAny remaining profit or loss shall be shared as follows: 40% to A and 30% each to B and C. The average capital investments of partners during the year are as follows: AP100,000 B 60,000 C 120,000 Case #1: The partnership earns profit of P100,000. Requirement: Compute for the respective shares of the partners on the partnership profit. Case #2: The partnership earns profit of P10,000. Requirement: Compute for the respective shares of the partners on the partnership profit. Case #3: The partnership incurs loss of P20,000. Requirement: Compute for the respective shares of the partners on the…4. The partnership agreement of Ta, Li and No provides for the year-end allocation of net income in the following order: First, Ta is to receive 10% of net income up to P100,000and 20% over P100,000, Second, Li and No are to receive 5% each of the remainingincome over P150,000. The balance of income is to be allocated equally among thethree partners. The partnership’s net income was P250,000 before any allocation topartners. What amount should be allocated to Ta?
- Required: Schedule of Profit Distribútion at the end of the period. OKsignment! 17 -5 Lucas Lara IV and Zola Mae Caumban started their partnership business two years ago Their partnership agreement provided among others, the following: 1. Lara, being a managing partner shall receive an annual salary of P20,000; 2. Caumban shall be entitled for an annual bonus of 10% of profit; 3. Interest of 10% on their respective ending capital balances of P85,000 and P150,000; 4. Any remainder not to exceed P30,000 shall be shared equally and in excess of P30,000 on the ratio 30%-70%. Required: Schedule of Profit Distribution assuming that profit for the year endeu December 31, 20A was: b) P80,000 a) P60,000Set 1 1. Ceradoy, Manongsong and Anuran are partners sharing residual profits in the ratio of 3:2:1. The partnership agreement provides for 8% interest on capital and a salary for Manongsong of P80,000 per anmum. Profit for 2019 was P840,000 and the year end balances on partner's capital accounts are as follows: Ceradoy, P2000,000; Manongsong, P150,000 and Anuran, P120,000. What was Anuran's share of residual profits for 2019? a. P120,400 b. P126,670 с. Р130,000 d. P140,000 2. Malaluan and Baral are in partnership. They share profits in the ratio 3:2 and close their accounts on June 30 each year. On Jan. 1, 2019, Castro joined the partnership. The profit-sharing ratio was revised to become Malaluan 50%, Baral 25% and Castro 25%, after providing for annual salaries as follows: Baral, P20,000 and Castro, P12,000. The partnership profit for the year ended June 30, 2019 was P480,000, accruing evenly over the year. What are the partners' total share in profits for the year ended June 30,…A and B formed a partnership in 20x1. The partnership contract stipulates the following: • P30,000 annual salary to each partner due at each year-end. • Bonus of 10% of profit after salaries and bonus for A • 8% interest on the partners' weighted average capital balances. • Any remaining profit or loss is divided equally. The partnership's ledger shows the following: A, Capital Ref. Date Debit Credit Balance March 1, 20x1 June 1, 20x1 001 30,000.00 30,000.00 20,000.00 098 10,000.00 August 1, 20x1 December 1, 20x1 211 146 20,000.00 40,000.00 5,000.00 35,000.00 B, Capital Date Ref. Debit Credit Balance March 1, 20x1 001 20,000.00 20,000.00 June 1, 20x1 098 10,000.00 10,000.00 August 1, 20x1 146 2,000.00 8,000.00 The partnership's profit, before salaries and bonus, in 20x1 is P60,000. The partners agreed to receive full annual salaries in 20x1. How much is the share of B?