HOMEWORK 2 (No. 8&9)
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Joana TrinidadHOMEWORK 2 (No. 8&9)
Uploaded by
Joana TrinidadSOLUTION:
Accounts Receivable 32,000 Bruce, Capital
Inventory 240,000
Equipment 322,000 240,000
Accounts Payable 200,000 600,000
Notes Payable 14,000 360,000
Bruce, Capital 380,000 166,000
Bruce, Capital 2,000 Cash
Accounts Receivable 2,000 Bruce, Capital
Bruce, Capital 102,000
Inventory 102,000
Bruce, Capital 82,000
Equipment 82,000
A. Prepare two journal entries to set up the partnership
Partnership Books
BRUCE RACHEL
Cash 166,000 Cash 93,500
Accounts Receivable 30,000 Inventory 146,500
Inventory 138,000 Rachel, Capital
Equipment 240,000
Accounts Payable 200,000
Notes Payable 14,000
Bruce, Capital 360,000
B. Prepare a statement of financial position for the partnership as at July 1 just after formation.
Bruce and Rachel Partnership
Statement of Financial Position
As of July 1, 2016
Amounts in Philippine Peso
ASSETS
Current Assets
Cash 259,500
Accounts Receivable 30,000
Inventory 284,500 574,000
Non Current Assets
Equipment 240,000
Total 814,000
LIABILITIES AND EQUITY
Current Liabilities
Accounts payable 200,000
Non Current Liabilities
Notes Payable 14,000 214,000
EQUITY
Rachel, Capital 240,000
Bruce, Capital 360,000 600,000
Total 814,000
C. Profit (before interest and salaries) on December 31 was P 120,500. Cash withdrawals made by Bruce and Rachel amo
Prepare a profit distribution table and one entry to record the distribution.
BRUCE RACHEL TOTAL
6% interest on Capital 21,600 14,400 36,000
Salaries 30,000 30,000 60,000
Total Interest and Salaries 51,600 44,400 96,000
Remaining profit 1:1 12,250 12,250 24,500
Total 63,850 56,650 120,500
Income Summary 120,500
Bruce, Drawings 63,850
Rachel, Drawings 56,650
D. Set up the general ledger (T Accounts) accounts to show each partners's equity.
Bruce, Capital Rachel, Capital
360,000 240,000
360,000 240,000
Bruce, Drawings Rachel, Drawings
30,000 63,850 44,000 56,650
33,850 12,650
E. Prepare a statement of changes in partners' equity.
Bruce and Rachel Partnership
Statement of Changes in Equity
For the year ended December 31, 2016
Amounts in Philippine Peso
Bruce Rachel Total
Capital, July 1 360,000 240,000 600,000
Share in Profit 63,850 56,650 120,500
Personal Drawings - 30,000 - 44,000 - 74,000
Capital, December 31 393,850 252,650 646,500
194,000
Contribution of Rachel (40%)
Total Contributions
Contribution of Bruce (60%)
Additional Cash Investment of Bruce
166,000
166,000
ACHEL
240,000
de by Bruce and Rachel amounted to P 30,000 and P 40,000 respectively.
C. The following year the business earned P250,000 with cash withdrawn by the partners as follows P50,000 by Bruce and P
Prepare a profit distribution table and one entry to record the distribution.
Bruce Rachel Total
12% interest on Capital 43,200 28,800 72,000
Salaries 60,000 60,000 120,000
Total Interest and Salaries 103,200 88,800 192,000
Remaining profit 1:1 29,000 29,000 58,000
Total 132,200 117,800 250,000
Income Summary 250,000
Bruce, Drawings 132,200
Rachel, Drawings 117,800
D. Set up the general ledger (T Accounts) accounts to show each partners's equity.
Bruce, Capital Rachel, Capital
393,850 252,650
393,850 252,650
Bruce, Drawings Rachel, Drawings
50,000 132,200 60,000 117,800
82,200 57,800
E. Prepare a statement of changes in partners' equity.
Bruce and Rachel Partnership
Statement of Changes in Equity
For the year ended December 31, 2017
Amounts in Philippine Peso
Bruce Rachel Total
Capital, January 1 393,850 252,650 646,500
Share in Profit 132,200 117,800 250,000
Personal Drawings - 50,000 - 60,000 - 110,000
Capital, December 31 476,050 310,450 786,500
as follows P50,000 by Bruce and P60,000 by Rachel
