Scribd
Upload
421 views3 pages

Baysas Problems Partnership Operations

The document contains information about the profit distribution for multiple partnerships. It provides income statements, capital account balances, assumptions about profit sharing ratios and terms. It asks to calculate the profit/loss shares for the partners under different assumptions, including salaries, bonuses, interest on capital, profit sharing ratios, and corrections for accounting errors.

Uploaded by

Honey Muli
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
421 views3 pages

Baysas Problems Partnership Operations

The document contains information about the profit distribution for multiple partnerships. It provides income statements, capital account balances, assumptions about profit sharing ratios and terms. It asks to calculate the profit/loss shares for the partners under different assumptions, including salaries, bonuses, interest on capital, profit sharing ratios, and corrections for accounting errors.

Uploaded by

Honey Muli
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
You are on page 1/ 3

Source: Book of Baysa and Lupisan -Accounting for Partnership and Corporation

A. The condensed income statement of Balte and Bala as of December 31, 2014 follows:

Sales 4800000
Cost of sales 2,100,000
Gross Profit 2,700,000
Operating Expense 1,000,000
Profit before tax 1,700,000
Income tax 30% 510,000
Net profit 1,190,000
The profit and loss agreement:

1. Interest of 8% is allowed on capital balances. Capital balances are P500,000 and P300,000
respectively, while withdrawals debited to drawing accounts during the year are P60,000 and 100,000
respectively.

2. Salary allowances to Balte and Bala are 120,000 and 80,000 respectively.

3. Bonus is given to Balte equal to 20% of profit without regard to interest and salary.

4. Remaining profit and losses are to be divided in the ratio of capital balances.

Prepare the schedule showing the distribution of profit to the partners.

Prepare journal entries required to distribute profit of the partnership (use drawings account)

Prepare a statement of changes in partner’s equity.

B. The capital account of Bondoc and Barba at the end of fiscal year are as follows:

BONDOC CAPITAL

Jan, 1 Balance 210,000


May 1 Investment 90,000
October 1 Withdrawal 60,000

BARBA CAPITAL

Jan, 1 Balance 150,000


April 1 Withdrawal 30,000
The partnership profit for the year ended December 31, is P300,000.
Compute the profit (loss) share of the partners under each of the following assumptions:

1. Profit is divided 60% to Bondoc and 40% to Barba.

2. Profit is divided in the ratio of capital balances at the beginning of the period.

3. Profit is divided in the ratio of average capital.

4. Interest at 8% is allowed on average capital and the balances of profit is divided equally.

5. Salaries of P60,000 and P48,000 are allowed to Bondoc and Barba respectively and the balance of
profit in the ratio of capital balances at the end of the period.

6. Bondoc is allowed a bonus of 331/3 of profit after bonus and the balance of the profit is divided in
the ratio of average capital.

C. Bernal and Borgus formed a partnership on Jan 1, 2019. The changes in their respective capital
balances during the year ended Dec 31, 2019 are :

Bernal. Capital Burgos, Capital


Oct-31 60,000 01-Jan 360,000 Jun-30 80,000 01-Jan 440,000.00
May-31 100,000.00 Oct-31 140,000.00

The partnership earned a profit of P350,000.

1. Bernal and Burgos as given salaries of P50,000 and P100,000, respectively, 10% interest on average
capital balances and the remainder is divided 4:6

2. Each partner receives 8% interest on beginning of the year capital balances and a salary of P50,000.

Bernal receives a bonus of 10% of profit after deducting interest and salaries, and the remainder is divided
in the ratio of 2:3.

COMPUTE THE PROFIT SHARE OF THE PARTNERS UNDER THE DIFFERENT ASSUMPTIONS.

D. Bans and Belda are partners who share profits equally and losses in 2:1 ratio. If they have beginning
capital balances of P120,000 and P118,000, made no additional investments nor withdrawals, and suffered
an unprofitable year with loss of P48,000, their capital balances will be:

Ban Belda

a. 40,000 80,000
b. 88,000 102,000

c. 120,000 118,000

d. 152,000 134,000

E. Borres, Buendiaand Bustos have capital balances of P250,000, P150,000 and P100,000 respectively.
Time devoted by the partners in the partnership follows:

Borres ¾ time

Buendia ¼ time

Bustos ½ time

Profit of the partnership is P600,000

1. No agreement

2. in the ratio of time devoted in the business

F. Balmes, Bamban and Buela are partnes sharing profits on a 5:3:2 ratio. For the year 2019, the
partnership books showed a net profit of P400,000. It was disclosed, however, that the following errors
were made.

2018 2019
Accrued expense not recorded at year end 24,000
Inventory overstatement 62,000
Purchases not recorded, for which goods have 40,000
been received and included in the inventory
Income received in advance not adjusted 30,000
Unused supplies not taken up at year -end 18,000

Compute the corrected profit of the partnership under the following assumption:

a. the partnership is a general professional partnership

b. the partnership is subject to 30% income tax.

You might also like

pFad - Phonifier reborn

Pfad - The Proxy pFad of © 2024 Garber Painting. All rights reserved.

Note: This service is not intended for secure transactions such as banking, social media, email, or purchasing. Use at your own risk. We assume no liability whatsoever for broken pages.


Alternative Proxies:

Alternative Proxy

pFad Proxy

pFad v3 Proxy

pFad v4 Proxy