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    Assignment02 PDF

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    Ailene Mendoza
    The document provides information about partnership operations and assignments involving division of profits and losses between partners. It includes three problems with multiple cases about how to allocate partnership profits, losses, salaries, bonuses, and interest payments based on capital contributions and partnership agreements. The assignments require calculating each partner's share and providing journal entries to close income accounts to partner capital accounts.

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    Assignment02 PDF

    Uploaded by

    Ailene Mendoza
    99 views2 pages
    The document provides information about partnership operations and assignments involving division of profits and losses between partners. It includes three problems with multiple cases about how to allocate partnership profits, losses, salaries, bonuses, and interest payments based on capital contributions and partnership agreements. The assignments require calculating each partner's share and providing journal entries to close income accounts to partner capital accounts.

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    The document provides information about partnership operations and assignments involving division of profits and losses between partners. It includes three problems with multiple cases about how to allocate partnership profits, losses, salaries, bonuses, and interest payments based on capital contributions and partnership agreements. The assignments require calculating each partner's share and providing journal entries to close income accounts to partner capital accounts.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    99 views2 pages

    Assignment02 PDF

    Uploaded by

    Ailene Mendoza
    The document provides information about partnership operations and assignments involving division of profits and losses between partners. It includes three problems with multiple cases about how to allocate partnership profits, losses, salaries, bonuses, and interest payments based on capital contributions and partnership agreements. The assignments require calculating each partner's share and providing journal entries to close income accounts to partner capital accounts.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    of 2

    Baliwag Polytechnic College

    Dalubhasaan Kong Mahal


    Institute of Business and Accountancy

    ACT27A – Accounting for Special Transactions M. Manayao, CPA

    Assignment 02 – Partnership Operations

    Division of profits and losses


    Problem 1
    A, B and C’s partnership agreement stipulates the following:
     Annual salaries of P12,000 to A and P8,000 to C.
     10% bonus to A, based on profit after salaries but before deducting the bonus.
     10% interest on the following capital contributions: A, P100,000; B, P60,000; and C, P120,000.
     P/L ratio of 40:30:30

    Case 1: Sufficient profit


    The partnership earns profit of P100,000. Compute for the partners’ respective shares.

    Case 2: Insufficient profit


    The partnership earns profit of P10,000. Compute for the partners’ respective shares.

    Case 3: Loss
    The partnership incurs loss of P20,000. Compute for the partners’ respective shares.

    Interest on weighted average capital


    Problem 2
    A and B’s partnership agreement stipulates the following:
     Monthly salary of P4,000 to A.
     20% bonus to A, based on profit after deductions for salary and bonus, but before deduction of interest.
     12% interest on B’s weighted average capital balance. B initially contributed P30,000. During the
    period, B contributed additional P10,000 on July 1 and P6,000 on November 30, and withdrew P4,000
    on October 1.
     Balance is shared equally

    Case 1: Full year


    The partnership earned profit of P90,000 before salaries, bonus and interest on capital, for the year ended
    December 31, 20x1.

    Required: Provide the journal entry to close the income summary account to the partners’ respective capital
    accounts.

    Case 2: Partial year


    The partnership earned profit of P90,000 before salaries, bonus and interest on capital, for the eight months
    ended December 31, 20x1.

    ASSIGNMENT 02 – ACT27A | M. MANAYAO, CPA 1


    Required: Provide the journal entry to close the income summary account to the partners’ respective capital
    accounts.

    Reconstruction of information
    Problem 3
    A and B’s partnership agreement stipulates the following:
     Annual salary of P20,000 to A.
     10% bonus to A, based on profit after salaries and bonus.
     Balance is shared on a 60:40 ratio.

    Required: If B’s share in the partnership profit for the year is P32,000, how much is the partnership profit
    before salary and bonus?

    - End -

    ASSIGNMENT 02 – ACT27A | M. MANAYAO, CPA 2

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