A and B formed a joint operation. The following were the transactions during the year: A в Total purchases 400 320 Total sales 480 240 Expenses paid 800 Other income 40 The joint operation was completed at the end of the year. Each joint operator is entitled to a 10% commission on its purchases and a 20% commission on its sales. Any remaining profit or loss is divided equally. On the cash settlement, how much should A received from B?
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- Problem 1. (Accounting for Joint Operation Transactions) Small, Medium, and Large formed a joint operation. The following were the joint operation transactions: a. Small transferred cash of P100,000 to Large, the appointed manager, representing Small's contribution. b. Medium contributed inventories worth P120,000. c. Large contributed cash of P80,000 d. Large purchased inventories worth P160,000 and paid freight of P20,000 using the cash contributions. e. Large made cash sales of P900,000. f. Large paid expenses of P240,000 from the JO-cash. Other information: • All inventories were sold except one-third from large's purchases. Large was charged for the cost of the unsold inventory. • The joint operators agreed on the following: o Large is entitled to a management fee of P6,000 and a bonus of 15% of profit after management fee and bonus. o Any remaining profit or loss is divided equally. Requirement: Case 1: No separate records are maintained a. Prepare the journal entries for…Joshua Bank (a NON-VAT registered entity) purchased an intangible asset from Tristan Co. for $590,000 when the exchange rate was ₱1: $.0204. A 5% discount was available on the purchase. Non-transferrable taxes paid amounted to 20% of the invoice price, net of the discount. A 12% VAT was also paid based on the amount that is gross of the non-transferrable taxes. Installation and testing costs amounted to ₱40,000. How much will be recorded as intangible asset? Question 7 options: a 36,976,059 b 33,010,598 c 33,050,589 d 36,967,0592. Merchandise should be revalued at 90% of the book value to provide for obsolence 4. Each of the prospective partner should level off their cash contribution to Chopter 16 They agreed to comply with the following adjustments: 1. Accounts Recelvable should have the following probability of collection: Espocia, P90%; Beringuel, 95%, and Alemanza, 98%. 3. Equipment should have the carryling values as follows: Espocia, P165,000; Beringuel, P150,000 and Alemanza, P180,000. P1,000,000. Required: 1.Adjusting entries in their respective sole proprietorship book. 2.Closing entries in their respective sole proprietorship book. 3.Compound journal entries to open the books of the partnership. 16 -5 John Mark Cadua who has been in business for a quite long time has decided to venture in partnership business with Michael Auditor. The Statement of Financial Position of J. .Cadua prior to the inception of the partnership revealed the following balances: P 85,000 Cash Accounts Receivable Allowance…
- Rooster Co. uses the installment sales method. Relevant information follows: 20x1 20x2Sales 300,000 480,000Cost of sales 240,000 336,000Installment receivable - 20x1 180,000 60,000Installment receivable - 20x2 360,000 Rooster Co. repossessed a property that was sold in 20x1 for ₱50,000. Total collections from this sale were₱24,000. Rooster Co. expects to resell the property for ₱30,000 after reconditioning costs of ₱4,000. The normalprofit margin on resale of repossessed property is 30%. 3. How much is the gain or loss on repossession? 4. How much is the total realized gross profit in 20x2? 5. How much is the profit recognized in 20x1?Use the following information for the next two questions:Rooster Co. uses the installment sales method. Relevant information follows: 20x1 20x2 Sales 300,000 480,000 Cost of sales 240,000 336,000 Installment receivable- 20x1 180,000 60,000 Installment receivable- 20x2 360,000 Rooster Co. repossessed a property that was sold in 20x1 for ₱50,000. Total collections from this sale were ₱24,000. Rooster Co. expects to resell the property for ₱30,000 after reconditioning costs of ₱4,000. The normal profit margin on resale of repossessed property is 30%.a.) How much is the gain or loss on repossession?b.) How much is the total realized gross profit in 20x2?Rooster Co. uses the installment sales method. Relevant information follows: 20x1 20x2Sales 300,000 480,000Cost of sales 240,000 336,000Installment receivable - 20x1 180,000 60,000Installment receivable - 20x2 360,000 Rooster Co. repossessed a property that was sold in 20x1 for ₱50,000. Total collections from this sale were₱24,000. Rooster Co. expects to resell the property for ₱30,000 after reconditioning costs of ₱4,000. The normalprofit margin on resale of repossessed property is 30%. 3. How much is the gain or loss on repossession? 4. How much is the total realized gross profit in 20x2?
- In which of the following situations would Martinez Indus-tries include goodwill in its balance sheet? a. The fair market value of Martinez’s net identifiableassets amounts to $2,000,000. Normal earnings for thisindustry are 15 percent of net identifiable assets. Netincome for the past five years has averaged $390,000.b. Martinez spent $800,000 during the current year for research and development for a new product that prom-ises to generate substantial revenue for at least 10 years. c. Martinez acquired Baxter Electronics at a price in excess ofthe fair market value of Baxter’s net identifiable assets. d. A buyer wishing to purchase Martinez’s entire opera-tion has offered a price in excess of the fair market value of the company’s net identifiable assets.Company A had a machine with a carrying amount of P450,000. Company B had a delivery vehicle with a carrying amount of P300,000. Companies A and B exchanged the machine and vehicle, and Company B paid an additional P90,000 cash as part of the exchange. Assume that the fair value of the delivery vehicle is P420,000. The exchange has commercial substance. How much gain or loss should be recorded by Company A? a. P60,000 gain b. P30,000 loss c. P120,000 loss d. P120,000 gainThe following are the information related to instalment sales made by Bimbo Co.:20X1 20X2Sales P200,000 P320,000Cost of Sales 160,000 224,000Gross profit rate 20% 30%Installment receivable, 20x1 90,000 30,000Installment receivable, 20x2 144,000During 20x2, Bimbo Co. has repossessed a property sold to a defaulted customer in 20x1 for P25,000. Prior to repossession, P5,000 were collected from the buyer. The repossessed property has an estimated resale price of P22,000. Reconditioning costs amount to P3,000. The normal profit margin is 30%.REQUIRED: 4. Compute the gain or loss on repossession ____________5. Compute the total realized gross profit in 20x2 ____________6. Net income recognized in 20x2 ____________
- Alvarez and Reymond, both NGAs, exchanged their equipment. Relevant data is presented below Alvarez Reymond Carrying amount 85,000 130,000 Fair value 95,000 115,000 Cash paid by Alvarez to Reymond 15,000 How much is the initial measurement of the equipment received by Reymond if the exchange has a commercial substance? Refer to the previous question, how much is the gain (loss) recognized by Reymond?On September 3, 2018, the Robers Company exchanged equipment with Phifer Corporation. The facts of theexchange are as follows:Robers’ Asset Phifer’s AssetOriginal cost $120,000 $140,000Accumulated depreciation 55,000 63,000Fair value 75,000 70,000To equalize the exchange, Phifer paid Robers $5,000 in cash.Required:Record the exchange for both Robers and Phifer. The exchange has commercial substance for both companies.Company A had a machine with a carrying amount of P450,000. Company B had a delivery vehicle with a carrying amount of P300,000. Companies A and B exchanged the machine and vehicle, and Company B paid an additional P90,000 cash as part of the exchange. Assume that the fair value of the delivery vehicle is P420,000. The exchange has commercial substance. How much gain or loss should be recorded by Company A? P120,000 gain P120,000 loss P30,000 loss P60,000 gain