3.15 Celso and Danilo formed a partnership on March 1, 200A, eachinvesting P 36,000. On July 1, 200A, Danilo made an additionalinvestment of P 12,000. On May 1, 200A, Celso made a capitalwithdrawal of P 4,800 but reinvested the same amount on October1, 200A. During 200A, Celso withdrew P 960 per month andDanilo, the managing partner, withdrew P 1,200 per month. Thesedrawings were charged to salary expense account.A pre-closing trial balance taken at December 31, 200Ashowed the following balances:CashP 10,80018,000Accounts ReceivableEquipmentOther Assets60,00022,80020,400Accounts PayableCelso CapitalDanilo Capital36,00048,00060,00020,4004,800Service IncomeRent ExpenseUtilities ExpenseSalaries of the partnersMiscellaneous Expenses21,6006,000The profit and loss sharing agreement provides for thefollowing:Monthly salary: Celso, P 960Danilo, P 1,200Interest of 12% per annum is allowed on the average capitalResidual income is to be divided equally.REQUIRED:How much is the partnership profit during the period?b. Prepare a Statement of Partners' Equity for the period endedDecember 31, 200A.

Answered: REQUIRED: a. How much is the…

REQUIRED: a. How much is the partnership profit during the period? b. Prepare a Statement of Partners' Equity for the period ended December 31, 200A.

CONCEPTS IN FED.TAX.,2020-W/ACCESS

20th Edition

ISBN:9780357110362

Author:Murphy

Publisher:Murphy

Chapter11: Property Dispositions

Section: Chapter Questions

Problem 53P

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Question

3.15 Celso and Danilo formed a partnership on March 1, 200A, each
investing P 36,000. On July 1, 200A, Danilo made an additional
investment of P 12,000. On May 1, 200A, Celso made a capital
withdrawal of P 4,800 but reinvested the same amount on October
1, 200A. During 200A, Celso withdrew P 960 per month and
Danilo, the managing partner, withdrew P 1,200 per month. These
drawings were charged to salary expense account.
A pre-closing trial balance taken at December 31, 200A
showed the following balances:
Cash
P 10,800
18,000
Accounts Receivable
Equipment
Other Assets
60,000
22,800
20,400
Accounts Payable
Celso Capital
Danilo Capital
36,000
48,000
60,000
20,400
4,800
Service Income
Rent Expense
Utilities Expense
Salaries of the partners
Miscellaneous Expenses
21,600
6,000
The profit and loss sharing agreement provides for the
following:
Monthly salary: Celso, P 960
Danilo, P 1,200
Interest of 12% per annum is allowed on the average capital
Residual income is to be divided equally.
REQUIRED:
How much is the partnership profit during the period?
b. Prepare a Statement of Partners' Equity for the period ended
December 31, 200A.

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