EXERCISE 8. Statement Preparation. The partnership of Rafa, Andy, and Novak was formed and started operations on January 1 of this year under the business name Grand Slam Tennis Center (GSTC), a business following the calendar year. The initial contributions of each partner were as follows: Rafa P350,000 Andy P300,000 Novak P100,000 Cash Training Equipment 200,000 On August 31, Rafa invested an additional P75,000 cash in the partnership. Andy made a permanent cash withdrawal of P60,000 on May 1 and reinvested P70,000 cash on October 1. According to partnership agreement, profits and losses are divided using average capital after the following: 10% interest on average capital balances; • Monthly salary allowances of P5,000 and P8,000 for Andy and Novak, respectively; and • 10% bonus to Rafa, the managing partner, based on net income before bonus and 30% inrome tay

EXERCISE 8. Statement Preparation. The partnership of Rafa, Andy, and Novak was formed and started operations on January 1 of this year under the business name Grand Slam Tennis Center (GSTC), a business following the calendar year. The initial contributions of each partner were as follows: Rafa P350,000 Andy P300,000 Novak P100,000 Cash Training Equipment 200,000 On August 31, Rafa invested an additional P75,000 cash in the partnership. Andy made a permanent cash withdrawal of P60,000 on May 1 and reinvested P70,000 cash on October 1. According to partnership agreement, profits and losses are divided using average capital after the following: 10% interest on average capital balances; • Monthly salary allowances of P5,000 and P8,000 for Andy and Novak, respectively; and • 10% bonus to Rafa, the managing partner, based on net income before bonus and 30% inrome tay

Accounting (Text Only)

26th Edition

ISBN:9781285743615

Author:Carl Warren, James M. Reeve, Jonathan Duchac

Publisher:Carl Warren, James M. Reeve, Jonathan Duchac

Chapter12: Accounting For Partnerships And Limited Liability Companies

Section: Chapter Questions

Problem 12.3BPR

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Instructions: Please answer it with complete solution. Thank you so much!! Rachelle, Patrick, and Lorreyn formed the RPL Professional Partnership on April 1, 20X2, by contributing capital. They agreed that Lorreyn would receive P20,000 as manager of the firm, and the remainder will be divided according to the profit ratio of 34%, 44%, 22%, respectively. At the end of the month, the company had a net loss of P900,000. Discuss how the loss shall be distributed in no more than five (5) sentences.
Can I please get help with this question?(6.5) Ries, Bax, and Thomas invested $48,000, $64,000, and $72,000, respectively, in a partnership. During its first calendar year, the firm earned $416,100. Required: Prepare the entry to close the firm’s Income Summary account as of its December 31 year-end and to allocate the $416,100 net income under each of the following separate assumptions. 3. The partners agreed to share income and loss by providing annual salary allowances of $39,000 to Ries, $34,000 to Bax, and $46,000 to Thomas; granting 10% interest on the partners’ beginning capital investments; and sharing the remainder equally.
Homework Activity 1 A, B and C are in Partnership sharing profits and losses in the ratio of 2:1:1. During the year ending 31st Dec 2019, the business made a profit of RO 64,000 before providing Interest on capital : A 2,000, B 1500, C 1000 Interest on drawings: A 200, B 150, C 100 Salary to Partners A 500 B 700 C 600 Commission to Partners A 200 B 300 C 400 Prepare a profit and loss appropriation account to show the distribution of profit among the partners.
2-Assume a Legal Entity’s capital structure consists of the following accounts General partner capital $240,000 Limited partner capital 2,160,000 Total capital $2,400,000 A Reporting Company is the sole general partner of the Legal Entity. The limited partnership capital was contributed by unaffiliated individual investors recruited by a regional boutique investment bank. The Reporting Company is paid an $180,000 management fee. The limited partners expect the partnership to be highly successful over the next five years. The investment bank estimated that the distribution of income to these investors should be at least $400,000 during the time period. What is the maximum amount of expected losses that the Legal Entity can expect to sustain without being considered a variable interest entity (VIE)?
PROBLEM 1On June 30, 20x8 A, the sole proprietor of A Inc, expandsthe company and establishes a partnership with B and C. Thepartners plan to share profits and losses as follows: A, 50%;B, 25% and C 25%. They also agree that the beginning capitalbalances of partnership will reflect this same relationship.A asked B to join the partnership because his many businesscontacts are expected to be valuable during the expansion. B iscontributing P40,000 and a building that has an original cost ofP520,000, book value of P420,000, tax assessment of P310,000 andfair value of P370,000. The building is subject to a P242,000mortgage that the partnership will assume. C is contributingP66,000 and marketable securities costing P252,000 but arecurrently worth P345,000.A's investment in the partnership is his business. He plansto pay off the notes with his personal assets. The other partnershave agreed that the partnership will assume the accounts payable.The balance sheet for the A Inc follows:…
Show Your Solutions 1) The following condensed Balance Sheet was prepared for Bi, Na, Ta partnership on March 31,200B: Cash P 30,000 Liabilities P 60,000 Other Assets P 190,000 Bi, Capital P 44,000 Na, Capital P 66,000 Ta, Capital P 50,000 P 220,000 P 220,000 The other assets were sold for P50,000. Profits are shared 4;4;2, for Bi, Na, and Ta, respectively. Bi is insolvent . The amount of cash received by Na was: 2) After the realization of non-cash assets, the following account balances appeared in the genera ledger of the partnership of See, Chap, and Pooh. Cash P 10,000 Liabilities 30,000 Pooh,Loan 5,000 See,Capital 15,000 Chap,Capital 10,000 Pooh,Capital 10,000 Profits are shared 2:4:4 for See, Chapand Pooh, respectively. Pooh is insolvent. How much was the loss on realization? 3) After realization…
6. The following balances have been taken from the balance sheet of a partnership firm as atDec. 31, 2020:Debit Balances:Cash Rs. 325,000, Accounts Receivable Rs. 300,000, Merchandise Inventory Rs. 575,000,Furniture Rs. 300,000Credit Balances:Allowance for bad debt Rs. 30,000, Allowance for depreciation-Furniture Rs. 120,000, AccountsPayable Rs. 50,000, X Capital Rs.500,000, Y Capital Rs. 600,000, Z Capital Rs. 200,000 The partners were sharing profit and loss in their capital ratio. On the mentioned date theydecided to liquidate the partnership firm and the following transactions were performed:a. Rs. 250,000 was collected as full and final settlement of accounts receivable.b. Merchandise inventory was sold for Rs. 500,000 cash.c. Furniture was sold for cash Rs. 145,000d. Accounts Payable was fully paid.e. Loss on liquidation was distributed among the partners.f. Final Settlement to the partners was made.Required:Record the above transactions in General Journal
Required: 3. Prepare journal entry to record Pedro’s admission. 4. During the first year of operations, the partnership earned P650,000. After Pedro’s admission, the profitand loss sharing ratio is 40:40:20 for Juan, Pablo, and Pedro, respectively, based on capital credits.Drawings were made in these amounts: Juan, P100,000; Pablo, P130,000; Pedro – P56,000. What isthe capital balance of Pedro after the first year?
43 On January 1, 20x4, the dental partnership of LL, CC and RR was formed when the partners contributed P20, 000, P60, 000 and P50,000, respectively, Over the next three years, the business reported net income and (loss) as follows: 20x4, P(30, 000); 20x5, P20, 000 and 20x6, P40, 000. During this period, each partner withdrew cash of P10, 000 per year. RR invested an additional P12,000 in cash on February 9, 20x5. At the time that the partnership was created the three partners agreed to allocate all profits and losses according to a specified plan written as follows: Each partner is entitled to interest computed at the rate of 12% per year based on the individual capital balances at the beginning of that year. Because of prior work experience, LL is entitled to an annual salary allowance of P12, 000 and Cc is credited with P8, 000 per year. Any remaining profit will be split as follows: LL, 20%; CC, 40%; and RR, 40%. If a loss remains, the balance will be allocated: LL, 30%; CC,…
The partnership of Angel Investor Associates began operations on January 1, 20Y5, with contributions from two partners as follows: Dennis Overton $180,000 Ben Testerman 120,000The following additional partner transactions took place during the year:1. In early January, Randy Campbell is admitted to the partnership by contributing $75,000 cash for a 20% interest.2. Net income of $150,000 was earned in 20Y5. In addition, Dennis Overton received a salary allowance of $40,000 for the year. The three partners agree to an income-sharing ratio equal to their capital balances after admitting Campbell.3. The partners’ withdrawals are equal to half of the increase in their capital balances from salary allowance and income.Prepare a statement of partnership equity for the year ended December 31, 20Y5.