3/7 Chapter 1 - Accounting for Partnership Formation & Operation Chapter 1 - Accounting for Partnership Formation & Operation 11. The distribution of net profit was: a. Gab, P572,000; Migs, (P136,800) " rahsid yd banwo peoriaud A Dawn and Dew, who share partnership profits and losses according to their weighted-average capital ratio, had capital accounts in 2021 as follows: Gab, P497,000; Migs, (P181,800) DIWI c. Gab, P549,500; Migs, (P246,300) "weighing sidi ai enhurt to fearstai Dawn, Capital Dew, Capital Gab, P553,000; Migs, (P148,200) 01/01 48,000 09/01 3,000 01/01 25,000 04/01 5,000 07/31 10,000 10/01 1,000 06/01 10,000 Love and Faith have been operating an accounting firm as partners for a number 09/30 5,000 11/30 1,000 of years and at the beginning of 2021, their capital balances were P120,000 and 12/01 4,000 P150,000, respectively. During 2021, Love invested an additional P20,000 on April 1 and withdrew P12,000 on August 30. Faith withdrew P24,000 on May 1 15. If the partnership reports a net income of P60,000 in 2021, Dawn's share would and invested P10,000 on November 1. In addition, Love and Faith withdrew their The salary allowances of P36,000 and P42,000, respectively. At year-end 2021 total P20,000 C. P37,500 capital of the Love and Faith partnership was P360,000. Love and Faith share P22,500 bobivibe d. 4 P40,000 income after salary allowances in a ratio of 55:45. Insta-Gram began operations on June 1, 2021. On that, Insta and Gram have 12. The share of Love on the 2021 net income is: capital credits of P175,000 and P240,000, respectively. The partnership has the a. PS8,800 c. P46,800 b. P57,600 following profit-sharing plan: d. P104,400 5 mmot obul brut. miof 1 riftw Inomiqiups a. 10% interest on partners' capital balances at the end of the year On May 2, 2021, Patrick, Chris and Mark formed the Three Thirteen Partnership b. P60,000 and P75,000 annual salaries of Insta and Gram, with the following initial contribution: Patrick - P150,000, Chris - P300,000 and respectively Mark - P300,000. After closing the partnership profit for 2021 and considering Remaining profit will be divided to Insta and Gram on a 60:40 the additional investments and withdrawals made, capital balances as of ratio, respectively December 31, 2021 are as follows: Patrick - P300,000, Chris - P400,000 and Mark - P500,000. Profit and Loss ratio agreed between the partners is 4:4:2 to Patrick, During the year, Insta invested P150,000 worth of merchandise and withdrew Chris and Mark, respectively. At the end of 2021, it is determined that the Income P40,000 cash, while Gram invested P120,000 cash. The partnership earned a Summary has a credit balance of P200,000. profit of P266,375 during the year. 39 ban 000,000.19 13. How much is the share of Patrick in 2021's operation result? " of anw ariby 16. How much is Insta capital balance at the end of 2021 a. (P80,000) C. P80,000 mooni lon orli to 201 a. P444,825 b.O P422,375 UP50,000 P40,000 indinzib ed al eww P426,625 P413,625 Dino and Gavin, partners, allow monthly salaries (P6,000 & P5,000, respectively CHAN and DARA are partners who agreed to share profits and losses in the and 6% interest on beginning capital (P300,000 & P230,000, respectively), and ollowing manner. then divide any remaining profit equally. Chan Dara Annual salaries P 259,000 14. On a net profit of P100,000, the respective shares would be: wolf enice P 261,000 a. P50,000 and P50,000 Interest on average capital 5% 10% b. P54,500 and P45,500 000.031 Bonus (based on net income after salaries 10% c. P56,600 and P43,400 25preys gnitmoqO & interest) Do.Ost d. P58,100 and P41,900 Remainder 50% 50% X Scanned with CamScar Chapter 1 - Accounting for Partnership Formation & Operation Chapter 1 - Accounting for Partnership Formation & Operation During the year ended December 31, 2021, the partnership's result of operation was P575,000 profit before any deduction. CHAN and DARA's average capital 21. How much is the share of Andie in the partnership profit? C. P1,500,000 balances for the year are P600,000 and P300,000, respectively. a. P1,750,000 b. P2,500,000 d. P2,000,000 17. How much is the total share of DARA in the net income for the year ended December 31, 2021? Wash has a 25% participation in the profits of a partnership. During the year, P287,500 P288,500 Wash's capital account has a net increase of P40,000. Wash made contributions of P286,500 d. P295,665 P160,000 and capital withdrawals of P240,000 during the year. Bing, Bong and Bang are partners with average capital balances during 2021 of 22. How much profit did the partnership earned during the year? c. P480,000 P120,000, P60,000 and P40,000, respectively. Partners will receive 10% interest on a. P120,000 b. P560.000 d. P720,000 their average capital balances. After deducting salaries of P30,000 to Bing and P20,000 to Bang, the residual profit or loss is divided equally. In 2021, the partnership sustained a P33,000 loss before interest and salaries to partners. Kenji and Hazel are partners in a merchandising business. During 2021, they withdrew their salary allowances of P34,000 and P59,000 respectively. Remaining 18. By what amount should Bing's capital account change? ard lo all profit or loss are shared in the ratio of 3:2 by Kenji and Hazel. The income summary account before any profit allocation has a credit balance of P180,000. a. P42,000 increase b. P35,000 decrease uniq grharia-titoin gru. The partners' capital accounts show the following: P11,000 decrease Kenji Hazel d. P7,000 increase I Lnow090.089. Beginning balance P85,000 P67,000 A and B formed a partnership. The partnership agreement stipulates the Additional investment 40,000 43,000 following Withdrawal other than (35,000 Annual salary allowance of P200,000 for A. salary (20,000) 90,000 90,000 b. Bonus to A of 10% of the profit after partner's salaries and bonus. Ending balance c. The partners share profits and losses on a 60:40 ratio. 23. What would be the capital balance of Kenji on December 31, 2021 after dividing the net income? During the period, the partnership incurred loss of P80,000. a. P176,000 c. P183,800 b. P142,200 d. P124,800 19. How much is the share of B in the partnership loss? a. P109,091 b. P112,000 C. P29,091 5- David, Curry, and Tomas have been partners throughout 2021. Their average d. PO balances and their balances at the end of the year before closing the nominal ban MAHO accounts are as follows: 20. By what amount did A's capital account change? Increase (decrease) atfullof a. (P29,091) P29,091 C. (P32,000) Partner Average Balances Balances, 12/31/2021. P32,000 Haloe founna David P97,500 P70,000 Sean and Andie formed a general professional partnership (practicing law) in the Curry 7,300 11,800 Philippines on January 1, 2021. Their capital contributions were credited to their Tomas 4,250 1,700 (debit balance) respective capital accounts as follows: Sean, Capital - P600,000; Andie, Capital - P1,000,000. During the year, the partnership earned profit of P4,000,000. The The income for 2021 is P103,500 before charging partners' salary allowances and income tax rate was 30%. before payment of interest on average balances at the agreed rate of 4% per annum. Annual salary allocations are P12,500 to David, P8,750 to Curry, and