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    Problem #21 Preparation of Financial Statements

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    The income statement shows net sales of $6,779,250 and net income of $759,420. The net income is divided among the partners with $405,330 going to Calamba and $354,090 to Santiago. The statement of changes in partners' equity shows the original investments of $612,000 for Calamba and $499,600 for Santiago. After deducting temporary withdrawals, the equity balances were $285,600 for Calamba and $254,800 for Santiago. Profits of $405,330 and $354,090 were added. The statement of financial position shows total assets of $2,276,640 equal to total liabilities and partners' equity. Assets

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    Problem #21 Preparation of Financial Statements

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    spp
    9K views4 pages
    The income statement shows net sales of $6,779,250 and net income of $759,420. The net income is divided among the partners with $405,330 going to Calamba and $354,090 to Santiago. The statement of changes in partners' equity shows the original investments of $612,000 for Calamba and $499,600 for Santiago. After deducting temporary withdrawals, the equity balances were $285,600 for Calamba and $254,800 for Santiago. Profits of $405,330 and $354,090 were added. The statement of financial position shows total assets of $2,276,640 equal to total liabilities and partners' equity. Assets

    Original Title

    Chapter 2 #21

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    The income statement shows net sales of $6,779,250 and net income of $759,420. The net income is divided among the partners with $405,330 going to Calamba and $354,090 to Santiago. The statement of changes in partners' equity shows the original investments of $612,000 for Calamba and $499,600 for Santiago. After deducting temporary withdrawals, the equity balances were $285,600 for Calamba and $254,800 for Santiago. Profits of $405,330 and $354,090 were added. The statement of financial position shows total assets of $2,276,640 equal to total liabilities and partners' equity. Assets

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    9K views4 pages

    Problem #21 Preparation of Financial Statements

    Uploaded by

    spp
    The income statement shows net sales of $6,779,250 and net income of $759,420. The net income is divided among the partners with $405,330 going to Calamba and $354,090 to Santiago. The statement of changes in partners' equity shows the original investments of $612,000 for Calamba and $499,600 for Santiago. After deducting temporary withdrawals, the equity balances were $285,600 for Calamba and $254,800 for Santiago. Profits of $405,330 and $354,090 were added. The statement of financial position shows total assets of $2,276,640 equal to total liabilities and partners' equity. Assets

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    Problem #21

    Preparation of Financial Statements

    The following are the adjusted accounts balances of Calamba and Santiago as at Dec 31, 2018:

    Accounts Payable P677820


    Accounts Receivable 545070
    Accumulated Depreciation-Equipment 462870
    Allowance for Uncollectible Accounts 18790
    Cash 132310
    Calamba, Capital 612000
    Calamba, Drawing 326400
    Equipment 753150
    Transportation In 224880
    General Expenses (control) 149390
    Interest Expenses 35000
    Merchandise Inventory, December 31 1320420
    Notes Payable 299000
    Prepaid Insurance 7350
    Purchases 5407160
    Purchases Discounts 43050
    Purchases Return and Allowances 259600
    Santiago Capital 499600
    Santiago, Drawing 244800
    Sales 7155000
    Sales Return and Allowances 375750
    Selling Expenses (control) 385880
    There were no changes in the partners’ capital accounts during the year. The merchandise inventory at the beginning of
    the year was P1440590. The partnership agreement provides for salary allowances of P330000 for Calamba and P290000
    for Santiago. It also stipulates an interest allowance of 10% on invested capital at the beginning of the year, with the
    remainder of the profit to be divided equally.
    Required:
    1. Prepare an income statement for the year. Show the division of profit.
    2. Prepare a statement of changes in partners’ equity for the year.
    3. Prepare a statement of financial position at the end of the year.
    Calamba and Santiago
    Income Statement
    Dec 31, 2018
    Net Sales
    7155000.0
    Sales 0
    Sales Return and Allowances 375750.00
    6779250.0
    Net Sales 0
    Cost of Sales
    1440590.0
    Merchandise Inventory, Jan 1 0
    5407160.0
    Purchases 0
    Purchases Discounts 43050.00
    Purchases Return and Allowances 259600.00 302650.00
    5104510.0
    Net Purchases 0
    Transportation In 224880.00
    5329390.0
    Net Cost of Purchases 0
    6769980.0
    Goods Available for Sale 0
    Merchandise Inventory, December 1320420.0
    31 0  
    5449560.0
    Cost of Sales 0
    1329690.0
    Gross Profit 0
    Operating Expenses
    General Expenses (control) 149390.00
    Selling Expenses (control) 385880.00
    Interest Expenses 35000.00      
    Total Operating Expenses 570270.00
    Profit 759420.00

      Calamba Santiago Total


    salary 330000.00 290000.00 620000.00
    interest 10% 61200.00 49960.00 111160.00
    remainder 1:1 14130.00 14130.00 28260.00
    profit 405330.00 354090.00 759420.00

    Calamba and Santiago


    Statement of Changes in Partners’ Equity
    Dec 31, 2018

    Calamba Santiago Total


    1111600.0 1111600.0
    Original Investments 612000.00 499600.00 0 0
    Less: Temporary Withdrawals 326400.00 244800.00 571200.00 571200.00
    Balances 285600.00 254800.00 540400.00 540400.00
    Add: Profit 405330.00 354090.00 759420.00 759420.00
    1299820.0 1299820.0
    Partners' Equity, Dec 31 690930.00 608890.00 0 0

    Calamba and Santiago


    Statement of Financial Position
    Dec 31, 2018
    Assets
    Cash 132310.00
    Accounts Receivable 545070.00
    Allowance for Uncollectible Accounts 18790.00 526280.00
    1320420.0
    Merchandise Inventory, December 31 0
    Prepaid Insurance 7350.00
    Equipment 753150.00
    Accumulated Depreciation-Equipment 462870.00 290280.00
    2276640.0
    Total Assets 0
    Liabilities & Partners' Equity
    Accounts Payable 677820.00
    Notes Payable 299000.00
    Calamba, Capital 690930.00
    Santiago Capital 608890.00
    2276640.0
    Total Liabilities and Partners' Equity 0

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