1. Owner Pedro invested an initial capital of amounting P50,000 in order to put up his janitorial services company. During the first year of operations (2018), the company had a loss of P25,000. Because of this, Pedro invested additional capital amounting to P50,000 in 2019. In the second year (2019), the company had a net income of P100,000 and Pedro withdrew P10,000 for personal use. > Compute for the ending capital balance of Pedro for the year 2019.
1. Owner Pedro invested an initial capital of amounting P50,000 in order to put up his janitorial services company. During the first year of operations (2018), the company had a loss of P25,000. Because of this, Pedro invested additional capital amounting to P50,000 in 2019. In the second year (2019), the company had a net income of P100,000 and Pedro withdrew P10,000 for personal use. > Compute for the ending capital balance of Pedro for the year 2019.
SWFT Essntl Tax Individ/Bus Entities 2020
23rd Edition
ISBN:9780357391266
Author:Nellen
Publisher:Nellen
Chapter18: Comparative Forms Of Doing Business
Section: Chapter Questions
Problem 1BD
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Transcribed Image Text:Required: Show all computations for each of the missing item.
1. Owner Pedro invested an initial capital of amounting P50,000 in order to put up his
janitorial services company. During the first year of operations (2018), the company
had a loss of P25,000. Because of this, Pedro invested additional capital amounting to
P50,000 in 2019. In the second year (2019), the company had a net income of
P100,000 and Pedro withdrew P10,000 for personal use.
> Compute for the ending capital balance of Pedro for the year 2019.
2. The following are the capital balances of DoReMi Partnership as of December 31,
2018:
• Domingo, Capital – P58,960
• Reyes, Capital - P63,200
• Miranda, Capital – P64,890
The partnership generated net income of P75,400 in 2019. According to the partnership
contract, the profit and loss sharing ratios are as follows: Domingo (25%), Reyes (37.5%),
and Miranda (37.5%).
The following were transactions with the partners during the year:
• Domingo made additional contribution of P7,640
• Reyes withdrew P5,000 for the business
• Miranda contributed P12,000 but withdrew P5,430.
Prepare the partnership's SCE
3. The Retained Earnings of Power Inc. shows a January 1, 2018 balance of P199,760. The
Board of Directors of Power Inc. distributed cash dividends of P11,000 to the
company's stockholders. As of December 31, 2019, the retained earnings reported a
balance of P280,990.
Determine Power Inc. net income for 2019. Prepare the corporation's SCE.
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