epe and Pilar decided to open a souvenir shop during the town's fiesta. They agreed to manage the stall in rotation, with Pepe reporting in the first seven hours starting at seven o'clock in the morning and Pilar from three o'clock in the afternoon up to nine o'clock in the evening. This arrangement required for profits to be divided equally. The transactions are as follows: 1. Pepe purchased the souvenirs at a cost of P150,000. 2. Pilar paid for the stall operating expenses, P50,000. 3. Cash sales were made and withheld by cach operator: Pepc, P125,000 and Pilar, P150,000. Pepe returned the remaining unsold souvenirs and got a cash refund of P15,000. 4. Profit was determined at the end of the town fiesta. 5. Cash settlement was made by the operators. Required: a) Record in each book only the transactions affecting each operator. b) Determine profit or loss and made the entry in each book. c) Record cash settlement supported by an accountability table.

epe and Pilar decided to open a souvenir shop during the town's fiesta. They agreed to manage the stall in rotation, with Pepe reporting in the first seven hours starting at seven o'clock in the morning and Pilar from three o'clock in the afternoon up to nine o'clock in the evening. This arrangement required for profits to be divided equally. The transactions are as follows: 1. Pepe purchased the souvenirs at a cost of P150,000. 2. Pilar paid for the stall operating expenses, P50,000. 3. Cash sales were made and withheld by cach operator: Pepc, P125,000 and Pilar, P150,000. Pepe returned the remaining unsold souvenirs and got a cash refund of P15,000. 4. Profit was determined at the end of the town fiesta. 5. Cash settlement was made by the operators. Required: a) Record in each book only the transactions affecting each operator. b) Determine profit or loss and made the entry in each book. c) Record cash settlement supported by an accountability table.

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

20th Edition

ISBN:9780357110362

Author:Murphy

Publisher:Murphy

Chapter6: Business Expenses

Section: Chapter Questions

Problem 25P

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