5 Max and Kenneth are partners in an eatery business with balances of P250,000 and P150,000...

 

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5 Max and Kenneth are partners in an eatery business with balances of P250,000 and P150,000 respectively. Partnership agreement calls for: 12% interest on capital, P6,000 monthly salary for Max as managing partner, remaining profit to be divided equally by the two partners. You are given the following independent situations: a) Result of a one year operation is a net profit of P170,000 after tax. b) Result of a one year operation was a net loss of P240,000. c) Result of a one year operation was a net profit of P120,000 before tax of 30%. d) Result of a six-month operation was a net profit of P110,250 before tax of 30%. e) Result of a three-month operation was a net loss of P75,000. Direction: Record the distribution based on the aforementioned situations supported by profit/loss allocation table. 8. Anthony Taverna invited Jose Elchico and Ted Baylon to be his partners on June 1,2019 to set up an advertising company. His business showed the following balances Debit Credit Cash P 20,000 Accounts Receivable 80,000 Allowance for bad Debts P 2,000 Merchandise Inventory Furniture & Equipment Allowance for Depreciation Accounts Payable Taverna, Capital 120,000 90,000 18,000 40,000 250,000 P310,000 11 Totals P310,000 Taverna will invest only the non- cash assets as well as the liabilities of his sol. proprietor owned business for a 60% share in partners' equity, the other two parten contributing cash equally for the remaining interest. They agree to consider the following adjustments for Taverna's contribution: 1. The accounts receivable has a realizable value of P70,000. 2. Merchandise inventory should be decreased by 10%. 3. Furniture and equipment are only worth 75% of its cost. Direction: a) Compute for the adjusted capital of Taverna. Adjust and close his books. b) How much will be the cash investment of Jose and Ted? c) Give one investment entry to open the books of the partnership. 5 Max and Kenneth are partners in an eatery business with balances of P250,000 and P150,000 respectively. Partnership agreement calls for: 12% interest on capital, P6,000 monthly salary for Max as managing partner, remaining profit to be divided equally by the two partners. You are given the following independent situations: a) Result of a one year operation is a net profit of P170,000 after tax. b) Result of a one year operation was a net loss of P240,000. c) Result of a one year operation was a net profit of P120,000 before tax of 30%. d) Result of a six-month operation was a net profit of P110,250 before tax of 30%. e) Result of a three-month operation was a net loss of P75,000. Direction: Record the distribution based on the aforementioned situations supported by profit/loss allocation table. 8. Anthony Taverna invited Jose Elchico and Ted Baylon to be his partners on June 1,2019 to set up an advertising company. His business showed the following balances Debit Credit Cash P 20,000 Accounts Receivable 80,000 Allowance for bad Debts P 2,000 Merchandise Inventory Furniture & Equipment Allowance for Depreciation Accounts Payable Taverna, Capital 120,000 90,000 18,000 40,000 250,000 P310,000 11 Totals P310,000 Taverna will invest only the non- cash assets as well as the liabilities of his sol. proprietor owned business for a 60% share in partners' equity, the other two parten contributing cash equally for the remaining interest. They agree to consider the following adjustments for Taverna's contribution: 1. The accounts receivable has a realizable value of P70,000. 2. Merchandise inventory should be decreased by 10%. 3. Furniture and equipment are only worth 75% of its cost. Direction: a) Compute for the adjusted capital of Taverna. Adjust and close his books. b) How much will be the cash investment of Jose and Ted? c) Give one investment entry to open the books of the partnership.

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INTEREST PAID TO PARTNERS ON CAPITAL AND SALARY PAID TO PARTNER FORM PART OF PROFIT ... View the full answer