Exercise 3-1 (Division of Profit using Ratios) Bong, Bueno, and Bunny formed a partnership and have capital balances of P350,000, P250,000 and P200,000, respectively. They devoted time to personally managed their partnership as follows: Bong Bueno Bunny three-fourths time one-half time one-fourth time Instructions: Determine the participation of the partners in the profit of P1,000,000 if profit is divided: 1. In the ratio of capital investments 2. In the ratio of time devoted in the business Follow the instructions strictly

Exercise 3-1 (Division of Profit using Ratios) Bong, Bueno, and Bunny formed a partnership and have capital balances of P350,000, P250,000 and P200,000, respectively. They devoted time to personally managed their partnership as follows: Bong Bueno Bunny three-fourths time one-half time one-fourth time Instructions: Determine the participation of the partners in the profit of P1,000,000 if profit is divided: 1. In the ratio of capital investments 2. In the ratio of time devoted in the business Follow the instructions strictly

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Exercise 3-1 (Divislon of Profit using Ratios) Bong. Bueno, and Bunny formed a partnership and have capital balances of P350,000, P250,000 and P200,000, respectively. They devoted time to personally managed their partnership as follows: Bong Bueno Bunny three-fourths time one-half time one-fourth time Instructions: Determine the participation of the partners in the profit of P1,000,000 if profit is divided: 1. In the ratio of capital investments 2. In the ratio of time devoted in the business Follow the instructions strictly
Exercise 3-2 (Division of Profit; Interest on Average Capital) Danica and Jenson are partners. Their capital accounts during the fiscal year 2019 were as follows: Danica, Capital 120,000 1/1 Jenson, Capital 3/1 180,000 1/n 1,200,000 140,000 100,000 9/1 800,000 160,000 60,000 4/1 7/1 11/1 10/1 Profit of the partnership is P250,000 for the year. Determine the partners shared profit under the following assumptions: 1. Each partner is to be credited 12% interest on his average capital. 2. Any remaining profit or loss is to be divided equally.
Exercise 3-2 (Division of Profit; Interest on Average Capital) Danica and Jenson are partners. Their capital accounts during the fiscal year 2019 were as follows: Danica, Capital 120,000 1/1 800,000 4/1 160,000 60,000 J enson. Capital 3/1 180,000 1/1 1,200,000 7/1 9/1 140,000 11/1 10/1 100,000 Profit of the partnership is P250,000 for the year. Determine the partners shared profit under the following assumptions: 1. Each partner is to be credited 12% interest on his average capital. 2. Any remaining profit or loss is to be divided equally. Follow the instructions strictly
Exercise 3-3 (Division of Profit; Interest on Capital and Salaries to Partners) Ruel and Renan have a capital balances at the beginning of the year of P600,000 and P675,000, respectively. They share profit as follows, 1. Interest of 8% on beginning capital balances 2. Salary allowances of P225,000 to Bueno and P115,000 to Renan 3. Balance in the ratio of 3:2. The partnership realized a profit of P375,000 during the current year before interest and salary allowances to partners. Instructions: 1. Show how the profit of P375,000 should be divided between Ruel and Renan 2. Assuming that Ruel and Renan simply agree to share profit in a 3:2 ratio with a minimum of P175,000 guaranteed to Renan, show the profit of P375,000 should be divided. 3 Give the journal entry to record the division of profit in No. 1 Give the journal entry to record the division of profit in no. 2 After the journal entries show your computations in good form. 4 Note:
Exercise 3-2 (Division of Profit; Interest on Average Capital) Danica and Jenson are partners. Their capital accounts during the fiscal year 2019 were as follows: Danica, Capital 120,000 1/1 800,000 4/1 160,000 11/1 60,000 J enson. Capital 3/1 180,000 1/1 1,200,000 7/1 9/1 140,000 100,000 10/1 Profit of the partnership is P250,000 for the year. Determine the partners shared profit under the following assumptions: 1. Each partner is to be credited 12% interest on his average capital. 2. Any remaining profit or loss is to be divided equally. Follow thle instructions strictly
Stephanie Calamba and Allan Brillantes decided to form a partnership. They agreed that Calamba will invest P200,000 andBrillantes, P300,000. Calamba will devote full time to the business, and Brillantes on part-time only. The following plans forthe division of profits are being considered: a. Equal divisionb. In the ratio of original investmentsc. In the ratio of time devoted to the businessd. Interest of 10% on original investments and the remainder in the ratio of 3:2e. Interest of 10% on original investments, salary allowances of P340,000 to Calamba and P170,000 to Brillantes, andthe remainder equally.f. Plan (e), except that Calamba is also to be allowed a bonus equal to the 20% of the amount by which profit exceedsthe salary allowances. Determine the partners’ share in profit or loss for each of the situations above assuming:(1) Profit of P1,500,000(2) Profit of P660,000
Scenario B: Partners A, B, and C operate a business with profit sharing agreement ratios of 5: 3:2, and capital balances of $300,000, $200,000, and $100,000 respectively. The total income for the year is $180,000. Each partner receives a fixed salary of $50, 000, and they are entitled to earn 10% interest on their capital balances. Calculate the total income allocated to Partner
Problem #5 SCORE: PROFESSOR: Distribution of Profits or Losses Based on Partners' Agreement Abad, Aglugub, and Onate agreed to share profits and losses according to the ratio of their respective investments at the beginning of the year of P300,000, P250,000, and P450,000. Calculate the share of each partner under the following conditions: (a) P270,000 profit; (b) P240,000 loss.
Exercise 2: Division of Income (I attached the question for Exercise 1 so please check it out. Thanks) Assume that in Exercise 1, the partnership of Bong and Lapira realized a net income of P17,400. How much must be the share of each partner therein under each of the following methods of dividing net income? Net income is divided based on the beginning capital ratio. Net income is divided based on the ending capital ratio. Net income is divided based on the average capital ratio. Interest of 12% is allowed on average capital with the remainder divided in the ratio of 6:4 between Bong and Lapira, respectively. Interest of 10% is allowed on average capital, salary allowance of P8,000 is given to Lapira, remainder to be divided in the ratio of 3:7 between Bong and Lapira.
Question Stephanie Calamba and Allan Brillantes decided to form a partnership. They agreed that Calamba will invest P200,000 and Brillantes, P300,000. Calamba will devote full time to the business, and Brillantes on part-time only. The following plans for the division of profits are being considered: 1. Interesto of 10% on original investments and the remainder 3:2 2. Interest of 10% on original investments, salary allowances of P340,000 to Calamba and P170,000 to Brillantes, and the remainder equally. 3. Plan (e), except that Calamba is also to be allowed a bonus equal to the 20% of the amount by which profit exceeds the salary allowances. Determine the partners’ share in profit or loss for each of the situations above assuming: (1) Profit of P1,500,000 (2) Profit of P660,000
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.
Profit Distribution. Almazar and Viray are partners in a business. Almazar's original capital contribution was P400,000 and Viray was P600,000. They agreed to share profits and losses as follows: Almazar Viray As Salaries P360,000 P480,000 As interest on original Capital 10% 10% Remaining profit or losses 2/3 1/3 Calculated each partner's share of profits and losses, assuming: a. Profit P700,000 b. Loss P35,000