Answered: On June 30, 2008, Jamal, the sole…

Survey of Accounting (Accounting I)

8th Edition

ISBN:9781305961883

Author:Carl Warren

Publisher:Carl Warren

Chapter9: Metric-analysis Of Financial Statements

Section: Chapter Questions

Problem 9.23E: Unusual income statement items Assume that the amount of each of the following items is material to...

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On June 30, 2008, Jamal, the sole proprietor of the Jamal Company, expands the company and establish a partnership with Jumong and Jabongga. The partners plan to share profits and losses as follows: Jamal, 50%; Jumong, 25%; and Jabongga, 25%. They also agree that the beginning capital balances of the partnership will reflect this same relationship. Jamal asked Jumong to join the partnership because his many business contacts are expected to be valuable during expansion. Jumong is also contributing P28,000 cash. Jabongga is contributing P11,000 cash and marketable securities costing P42,000 to Jabongga but are currently worth P57,500. Jamal’s investment in the partnership is the Jamal Company. He plans to pay off the notes with personal assets. The other partners have agreed that partnership will assume the accounts payable. The Statement of Financial Position for the Jamal Company follows:

Jamal Company
Statement of Financial Position
June 30, 2008
Assets
P 10,000
48,000
Cash
Accounts receivable (net)
Inventory
Equipment (net of accumulated depreciation, P20,000)
72,000
70,000
P 200,000
Total Assets
Liabilities and Capital
Accounts Payable
P 53,000
Notes Payable
62,000
Jamal, Capital
Total Liabilities and Capital
85,000
P 200,000
The partners agree that the inventory is worth P85,000, and the equipment is worth half its original cost,
and the allowance established for doubtful accounts is correct.
REQUIREMENT: Compute the bonus received by Jumong.
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Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

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