March 1, 20x5, with DD contributing P30,000 cash and BB investing cash of P10,000 and equipment with an agreed upon valuation of P20,000. On July 1, 20x5, BB invested an additional P10,000 in the partnership, DD made a capital withdrawal of P4,000 on May 2, 20x5 but reinvested the P4,000 on October 1, 20x5. During 20x5, DD withdrew P800 per month and BB, the managing partner, withdrew P1,000 per month. These drawings were charged fo salary expense. A preclosing trial balance taken at December 31, 20x5 is as follows: Debit Credit Cash . Receivable -net. Equipment - net. Ofher assets. Liabilities . DD, capital.. BB, capital Service revenue Supplies expense Utilifies expense. Salaries to partners Other miscellaneous expenses P 9,000 ................................ 15,000 50,000 19,000 ....... ..................... ........................................... P 17,000 30,000 40,000 50,000 ............................................. ............ ................... ....... 17,000 4,000 18,000 5,000 ....... .......... ....... .................... Total . P137,000 P137000 ....... Compute for the share of DD and BB in the partnership net income assuming monthly salary allowances P800 and P1,000 for DD and BB, respectively; interest allowance at a 12% annual rate on average capital balances; and remaining profits allocated equally. a. DD, P10,520; BB, P13,480 b. DD, P12,000; BB, P12,000 DD, P10,800; BB, P13,200 C. d. DD, P10,600; BB, P13,400
March 1, 20x5, with DD contributing P30,000 cash and BB investing cash of P10,000 and equipment with an agreed upon valuation of P20,000. On July 1, 20x5, BB invested an additional P10,000 in the partnership, DD made a capital withdrawal of P4,000 on May 2, 20x5 but reinvested the P4,000 on October 1, 20x5. During 20x5, DD withdrew P800 per month and BB, the managing partner, withdrew P1,000 per month. These drawings were charged fo salary expense. A preclosing trial balance taken at December 31, 20x5 is as follows: Debit Credit Cash . Receivable -net. Equipment - net. Ofher assets. Liabilities . DD, capital.. BB, capital Service revenue Supplies expense Utilifies expense. Salaries to partners Other miscellaneous expenses P 9,000 ................................ 15,000 50,000 19,000 ....... ..................... ........................................... P 17,000 30,000 40,000 50,000 ............................................. ............ ................... ....... 17,000 4,000 18,000 5,000 ....... .......... ....... .................... Total . P137,000 P137000 ....... Compute for the share of DD and BB in the partnership net income assuming monthly salary allowances P800 and P1,000 for DD and BB, respectively; interest allowance at a 12% annual rate on average capital balances; and remaining profits allocated equally. a. DD, P10,520; BB, P13,480 b. DD, P12,000; BB, P12,000 DD, P10,800; BB, P13,200 C. d. DD, P10,600; BB, P13,400
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Transcribed Image Text:33. The partnership of DD and BB was formed and commenced operations on
March 1, 20x5, with DD contributing P30,000 cash and BB investing cash of
P10,000 and equipment with an agreed upon valuation of P20,000. On
July 1, 20x5, BB invested an additional P10,000 in the partnership, DD made
a capital withdrawal of P4,000 on May 2, 20x5 but reinvested the P4,000
on October 1, 20x5. During 20x5, DD wifhdrew P800 per month and BB, the
managing partner, withdrew P1,000 per month. These drawings were
charged to salary expense. A preclosing trial balance taken at December
31, 20x5 is as follows:
Debit
Credit
Cash .
Receivable - net.
Equipment - net..
Ofher assets.
Liabilities ..
DD, capital .
BB, capital
Service revenue
Supplies expense
Utilifies expense.
Salaries to partners
Other miscellaneous expenses
P 9,000
15,000
50,000
19,000
.........
...................... ...
...........
P 17,000
30,000
40,000
50,000
.........................................
............
........
17,000
4,000
18,000
5,000
......
..........
........
............
Total .
P137,000 P137000
Compute for the share of DD and BB in the partnership net income
assuming monthly salary allowances P800 and P1,000 for DD and BB,
respectively; interest allowance at a 12% annual rate on average capital
balances; and remaining profits allocated equally.
a.
DD, P10,520; BB, P13,480
C.
DD, P10,800; BB, P13,200
b. DD, P12,000; BB, P12,000O
d.
DD, P10,600; BB, P13,400
(Adapted)
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