Comprehensive Problems
Comprehensive Problems
Comprehensive Problems
1. On May 1, 2014, the capital accounts of S, T and C are P 1,260,000; P
787,500 and P 472,500, respectively. At this time, I is admitted to the firm,
he purchased a 1/6 interest in the firm for P 288,750. Afterwards, all the
partners agree to divide profits and losses equally. The new partnership
closes its books on June 30, 2014 reporting profit of P 44,100 for two
months. Each partner made the following withdrawals: S and C P 2,625 per
month while T and I, P 3,500 per month. On June 30, 2014, I invest enough
cash to increase his capital to a 1/3 interest in the partnership. How much
cash is to be invested by I?
2. The balance sheet of the proprietorship of Puno as of June 30, 2016 showed
the following assets and liabilities:
Cash: 40,000
Accounts receivable: 53,600
Inventory: 88,000
Equipment: 65,600
Accounts payable: 63,520
What are the correct capital balances of Proactive and Focused as of December
31, 2021?
A net loss of P10,000 is reported by the partnership during the first year of
its operation. On January 1, 2011, Paulo Cruz becomes a third partner in
this business by contributing P15,000 cash to the partnership. Cruz receives
a 20 percent share of the business's capital. The profit and loss agreement is
altered as follows:
Santos is still entitled to (1) interest on his beginning capital balance
as well as (2) the share of partnership income just specified.
Any remaining profit or loss will be split on a 6:4 basis between Reyes
and Cruz, respectively.
Partnership income for 2011 is reported as P44,000. Each partner
withdraws the full amount that is allowed.
On January 1, 2012, Cruz falls ill and sells his interest in the partnership
(with the consent of the other two partners) to Juan Diaz. Diaz pays P46,000
directly to Cruz. Net income for 2012 is P61,000 with the partners again
taking their full drawing allowance.
On January 1, 2013, Diaz elects to withdraw from the business for personal
reasons. The partnership contract contains a provision stating that any
partner may leave the partnership at any time, and it’s entitled to receive
cash in an amount equal to the recorded capital balance at that time plus 10
percent.
Required:
a. Prepare journal entries to record the preceding transactions on the
assumption that the bonus (or no revaluation) method is used. Drawings
need not be recorded, although the balances should be included in the
closing entries.
5. Lina, Mina, and Nina are partners sharing profits on a 5:3:2 ratio and have
the following capital account balances: P150,000, P90,000, and P60,000,
respectively. On January 1, 2010, Olga was admitted into the partnership by
investing P40,000 with a 20% share in the profits. The old partners continue
to participate in profits proportionate to their original ratios.
For the year 2010, the partnership books showed a net profit of P50,000. It
was disclosed, however that the following errors were made:
2009 2010
Unrecorded accrued expenses at 2,400
year end
Inventory overstated 6,200
Unrecorded purchases, for which
goods have been received and 4,000
inventoried
Income received in advance not 3,000
adjusted
Unused supplies not taken up at 1,800
year end
On January 1, 2011, Lina sold her interest to Mina for P100,000. After which
Mina, Nina and Olga agreed to share annual profits of P300,000 equally
among themselves. During 2011, Mina withdrew P20,000; Nina withdrew
P10,000 and Olga also withdrew P5,000.
At the end of 2012, Mina decided to retire from the partnership and was
paid P425,360 cash. It was agreed that the inventory with a book value of
P50,000 would be adjusted to reflect their fair value of P35,000 and that
total goodwill is to be recognized. Net income for the year was P195,000.
Required:
a. What is the share of partner Lina in the 2010 corrected net income?
b. What is the capital balance of Mina on December 31, 2010?
c. What is the capital balance of Olga on December 31, 2011?
d. What is the capital balance of Nina on December 31, 2012?
DT Partnership
Statement of Financial Position
As of October 31, 2021
Assets
Current Assets:
Cash P 41,100
Accounts Receivable P 212,160
Allowance for Bad 8,000 204,160
Debts
Inventories 241,100
Prepaid Expenses 10,140
P 496,500
Noncurrent Assets:
Furniture and P 259,700
Fixtures
Accumulated 68,200 191,500
Depreciation
Total Assets P 688,000
Liabilities and Capital
Current Liabilities:
Accounts Payable P 161,400
Accrued Expenses 20,000 P 182,200
Partner’s Capital:
D, Capital P 269,700
T, Capital 236,100 505,800
Total Liabilities and P688,000
Capital
Additional Information:
D and T share profits and losses equally
The partners incorporate as Relevant Corporation with an authorized
capital of 5,000 shares at P100 par stock, of which 4,400 are issued to
the partners in exchange for their interest in the net assets of D and T,
and the remainder are issued at P120 per share for cash. The partners
agree that the following adjustment should be recorded:
o Allowance for bad debts decreased by P 4,000
o Inventories increased by 12,000
o Accumulated depreciation decreased by 6,200
Required:
a. How much is the share premium contributed by D and T to the new
corporation?
b. How many shares will D and T receive, respectively?