De Villa and De Vera are partners operating a small of chain of grocery stores. Their business has grown substantially over the last five years they just amended their partnership agreement to provide for the following distribution of profits and losses: De Villa De Vera Salaries 30,000 None Commission on gross sales None 2% Interest on average capital balances 8% 8% Bonus 10% of NI after salary. 10% of NI after interest Commission, interest and bonus, commission and bonus Remainder 50% 50% Gross sales for 2013 were P1,000,000. Income before deducting salaries, commission, interest and bonus were P222,000. Average capital balances were P410,000 andP390,00 for De Villa and De Vera.

De Villa and De Vera are partners operating a small of chain of grocery stores. Their business has grown substantially over the last five years they just amended their partnership agreement to provide for the following distribution of profits and losses: De Villa De Vera Salaries 30,000 None Commission on gross sales None 2% Interest on average capital balances 8% 8% Bonus 10% of NI after salary. 10% of NI after interest Commission, interest and bonus, commission and bonus Remainder 50% 50% Gross sales for 2013 were P1,000,000. Income before deducting salaries, commission, interest and bonus were P222,000. Average capital balances were P410,000 andP390,00 for De Villa and De Vera.

Name: Required: a. Prepare a schedule of income allocation for 2013.b. Prepa
Uploaded: 2024-03-05T11:47:04.000Z
Channel: Bartleby
Description: Required: a. Prepare a schedule of income allocation for 2013.b. Prepare the general journal entry to close the Income Summary account. • Problem 2-3:De Villa and De Vera are partners operating a small of chain of grocery stores. Theirbusiness has gr

SWFT Comprehensive Volume 2019

42nd Edition

ISBN:9780357233306

Author:Maloney

Publisher:Maloney

Chapter18: Corporations: Organization And Capital Structure

Section: Chapter Questions

Problem 3RP

See similar textbooks

Similar questions

Distribution of Profits and Losses: 3. Bunag, Belen, and Bustos are partners in an accounting firm. Their capital account balances at year-end were P180,000, P220,000, and P100,000, respectively. They share profits and losses on a 4:4:2, ratio respectively, after considering the following terms: a. Bustos is to receive a bonus of 10% of profit after deducting bonus b. Interest of 10% shall be paid on that portion of a partner's capital in excess of P200,000. c. Salaries of P20,000 and P24,000 shall be paid to partners Bunag and Bustos, respectively. Assuming a profit of P220,000 for the year. REQUIRED: Prepare the following: A. Profit or Loss Distribution Table B. Corresponding JOURNAL ENTRY to distribute profit or loss
Distribution of Profits and Losses: 2. Rene, Michael and Kevin are partners in an accounting firm. Their capital account balance at year-end were Rene, P90,000; Michael, P120,000; and Kevin, P160,000. They share profit and losses on a 4:4:2 ratio after considering the following terms: a. Kevin is to receive a bonus of 10% of net income. b. Interest of 5% shall be paid on partner's capital. c. Salaries of P8,000 and P10,000 shall be paid to partners Rene and Kevin respectively. Assuming a net income of P84,000 for the year. REQUIRED: Prepare the following: A. Profit or Loss Distribution Table B. Corresponding JOURNAL ENTRY to distribute profit or loss
Fit and Ryt are partners operatinga grocery store. Theirpartnership agreement requires that profits and losses be divided as follows: Fit Ryt Salaries P20,000 None Commission on gross sales Interest on average capital balances 2 percent 8 percent None 8 percent Bonus 20% of net income before commission, andinterest but after salaries and bonus Remainder 60% 40% Gross salesfor 2011 were P1, 250,000. Income before deducting amounts for salary, commission, interest and bonus were P200,000. Average capital balances of fit and Ryt are P400,000 and P420,000, respectively. What are the profit share of Fit and Ryt, respectively?
A, B, and C have been partners for years and have been dividing the profits 2:3:3 with the following balances: DR: Cash 120,000 DR: AR 420,000 CR: ADA 25,000 DR: Inventory 580,000 DR: Vehicle 1,000,000 CR: Accum. Dep'n 600,000 CR: Accounts Payable 595,000 CR: B, Loan 100,000 CR: A, Capital 300,000 CR: B, Capital 200,000 Cr: C, Capital 300,000 After realization and payment of external debt, how much cash would the partnership have left for distribution to partners? a. 595,000 O b. 920,000 O c. 325,000 O d. 575,000
3 : A. In A Mudaraba contract , IFI contributed BD 150,000 to establish a company with Mr. Mohammed , the profit - sharing ratio was 60:40 Evaluate the two cases . 1 ) If after the first year the Mudaraba generate a profit of BD 90,000 , what's Mr. Mohamed share on profit out of this Mudaraba Answer : 2 ) If after the first year the Mudaraba had a Loss of BD 50,000 what's the impairment loss of the project investment incurred by IFI . Answer :
Rules for the Distribution of Profits or Losses NAME: SCORE: SECTION: PROFESSOR: Problem #9 In January 2018, Nick Marasigan and Dems Asacta agreed to produce and sell chocolate candies. Marasigan contributed P2,400,000 in cash to the business. Asacta contributed the building and equipment, valued at P2,200,000 and P1,400,000, respectively. The partnership had profits of P840,000 during 2018 but was less successful during 2019, when profit was only P400,000. Required: 1. Prepare the journal entry to record the investment of both partners in the partnership. 2. Determine the share of profit for each partner in 2018 and 2019 under each of the following conditions: a. The partners agreed to share profit equally. b. The partners failed to agree on a profit-sharing arrangement. C. The partners agreed to share profit according to the ratio of their original investments. d. The partners agreed to share profits by allowing interest of 10% on their original investments and dividing the remainder…
Practice Exercise 6-3: (Profit or Loss Distribution – No agreement, Equally, Arbitrary Ratio) Ann and Dox contributed P150,000 and P300,000 cash, respectively, to put up the capital for a cell phone loading business. The business had normal first year problems, but during the second year the operation was very successful. The company reported the following key operating performance figures for 2019 and 2020 of operations: Year 2019 Year 2020 Operating Revenues P980,000 P320,000 Operating Expenses 820,000 380,000 Instruction: Determine how the partners would share the income or loss for each year under each of the following assumptions: a. Ann and Dox failed to include stated ratios in the partnership agreement. Year 2019 Ann Dox Year 2020 Ann Dox b. The partners agreed to share income or losses equally. Year…
Q.1 S, K and P are in business in Partnership as Machinery Manufacturers. They share Profits as 4:3:3 after allowing for interest at 5% on the balances of their capital accounts at the beginning of each year and after charging Partners salaries at the rate of RO 8,000; RO 6,400; RO 5,600 per annum respectively. They employ a sales manager who is paid a salary of RO 4,800 per annum plus one percent commission on total sales. The following Balances was extracted on 31st December 2020. Capital Accounts S 23,200 13,600 12,800 6,440 300,000 13,600 K Cash at Bank Purchase of Raw Material Discount Dr. Rent and Insurance 9,240 Sundry Creditors Factory Expenses Office Expenses Sundry Debtors 25,200 38,000 2,400 12,800 6,400 600 Furniture Telephone Sales 520,000 23,600 96,000 Opening stock of Raw Material Carriage inwards Salaries (Including sales manager 14,400 salary) Repairs to Buildings Bad debts 800 Carriage Outwards Vehicle 3,200 3,600 5,200 Drawings 9,600 8,800 8,400 4,800 4,400 5,600…
Practice Exercise 6-3: (Profit or Loss Distribution – No agreement, Equally, Arbitrary Ratio) Ann and Dox contributed P150,000 and P300,000 cash, respectively, to put up the capital for a cell phone loading business. The business had normal first year problems, but during the second year the operation was very successful. The company reported the following key operating performance figures for 2019 and 2020 of operations: Year 2019 Year 2020 Operating Revenues P980,000 P320,000 Operating Expenses 820,000 380,000 Instruction: Determine how the partners would share the income or loss for each year under each of the following assumptions: The partners agreed to share in the ratio of 1/3 and 1/6 for Ann and Dox, respectively. Year 2019 Ann Dox Year 2020 Ann Dox…
3.12 L, V, and M put up an accounting firm on January 1, 200A. Their capital balances on December 31, 200A prior to the distribution of profits were: notod L P 225,000 275,000 125,000 V Their profit and loss sharing agreement provides for the following allowances: * V is to receive a bonus of 10% of the net profit after bonus but before interest and salaries. *10% interest is allowed on a partner's capital in excess of P 250,000. * Salaries of P 25,000 and P 30,000 shall be allowed to L and M, respectively. *- * The residual income is to be divided 3:3:4 for L, V, and M, respectively. The partnership earned P 110,000 during the year 200A. REQUIRED: a. Show how the net income will be divided. b. Give the journal entry to record the division of the net income.
Ste page Problem 33: Marie and Paz are partners in manufacturing business located in Manila. Their profit and loss agreement contains the following provisions: Salaries of P35,000 and P40,000 for Marie and Paz, respectively. A bonus to Marie equal to 10% of net income after the bonus 1. 2. 3. Interest on weighted average capital at the rate of 8%. Annual drawings in excess of P20,000 are considered to be a reduction of capital for purposes of this calculation. 4. Profit and loss percentages of 40% and 60% for Marie and Paz, respectively Capital and drawing activity of the partners for the year 20x1 are as follows: Marie Beginning balance Paz 60,000 120,000 20,000 April 1. June 1. (15,000) (20,000) Sept 1. 30,000 Nov 1. (15,000) 40,000 Assuming net income for 20x1 of P132,000, how much profit should be allocated to each partner? a. P69,747; P62,253 c. P65,747; P66,253 b. P70,747; P61,253 d. P60,000; P60,000
3.12 L, V, and M put up an accounting firm on January 1, 200A. Their capital balances on December 31, 200A prior to the distribution of profits were: L P 225,000 275,000 125,000 V M Their profit and loss sharing agreement provides for the following allowances: * V is to receive a bonus of 10% of the net profit after bonus but before interest and salaries. * 10% interest is allowed on a partner's capital in excess of P 250,000. * Salaries of P 25,000 and P 30,000 shall be allowed to L and M, respectively. * The residual income is to be divided 3:3:4 for L, V, and M, respectively. The partnership earned P 110,000 during the year 200A. REQUIRED: a. Show how the net income will be divided. b. Give the journal entry to record the division of the net income.