The income for 2021 is P51,750 before charging partners' salary allowances and before payment of Interest on average balances at the agreed rate of 4% per annum. Annual salary allocations are P6,250 to Ruby, P4,375 to Sapphire, and P3,125 to Emerald. The balance of the profits is to be allocated at the rate of 60% to Ruby, 10% to Sapphire, and 30% to Emerald. It is intended to distribute cash to the partners so that, after credits and allocations have been made as indicated in the preceding paragraph, the balances in the partners' accounts will be proportionate to their residual profit- sharing ratios. None of the partners is to invest additional cash, but they wish to distribute the lowest possible amount of cash. How much are capital balances of Ruby Sapphire and Emerald, respectively
Q: The following items were included in the inventory list of ABC Corp: Materials unused in the…
A: A manufacturing bussiness means any business that use raw materials, parts, components to process…
Q: Given the following data from a recent Comparative Competitive Efforts page in the CIR: Your…
A: Competitive factors refers to the capabilities and the skills that differentiate the firm from the…
Q: Assume a payroll tax of 15% on every dollar earned and a 10% income tax on every dollar earned above…
A: Answer:- Tax burden = 22,000 Explanation:- Computation of tax burden:- Payroll tax = Tax rate x…
Q: Question 1 Au Farm Ltd leases a Tractor from Agrimachine Ltd that cost Agrimachine Ltd $ 80 000 to…
A: Here discuss about the details of the calculation of leases and its liability which are incurred in…
Q: Victoria Developments has obtained $3.6 million of total capital from three sources. Preferred…
A: Total capital = $3.6 million = $3,600,000 Preferred equity = $550,000 Common equity = $1.2 million =…
Q: In the beginning of 2021, Ciento Company purchased equipment worth P250,000. It is estimated to be…
A: Depreciation: Depreciation means the reduction in the value of an asset over the life of the assets…
Q: True false
A: The price-earnings ratio is a ratio that tells investors what is the worth of the company they have…
Q: The Just in Time operating system with backflush pricing is used by Johnson Textiles Company. The…
A: Cost of goods sold: It is the cost incurred by a business that is directly related to the production…
Q: You are given the following information about Target Inc.: Identifiable assets: Carrying amount: $…
A: Goodwill (Full) = Sale Consideration - Fair Value of Net Identifiable Assets Goodwill (Partial) =…
Q: According to PFRS9 Financial Instruments, a financial instrument is recognized when the entity…
A: As per PFRS 9 Financial Instruments, a financial instrument is recognized when the entity becomes a…
Q: Tucker Pup's Pet Resort offers dog boarding services in Chicago. Assume that in March, when dog-…
A: Introduction: Operating expenditures are the expenses incurred by the company in order to operate or…
Q: Sheffield's Book Warehouse distributes hardcover books to retail stores and extends credit terms of…
A: Journal entry is the primary step to record transaction in the books of account. The debit and…
Q: A company just starting its business made the following four inventory purchases in June:
A: Cost per unit. = Total Cost / No.of units purchased June 1 : $832/260 = $3.2 June 10 : $1056/320 =…
Q: A company purchased two new delivery vans for a total of $250,000 on January 1, Year 1. The compang…
A: Purchase of delivery vans total cost=$250,000 Payment made in cash=$40,000 Note to be paid in…
Q: become entrepreneurs
A: An entrepreneur is a person having some new idea or way of doing a business. He is the one who is…
Q: Record the following transactions: A. Started a petty cash fund in the amount of $ 1,500. B.…
A: Petty cash: Petty cash fund is established to manage the payment for the small business expenditure…
Q: The following information pertains to the inventory of Parvin Company for Year 3: Jan. 1 Beginning…
A: LIFO is the last in first out wherein the goods purchased at the end are to be sold first and FIFO…
Q: The following information relates to noncurrent investments that High Corp. placed in trust as…
A: A sinking fund refers to sum accumulated by the company for the purpose of repayment of debt/…
Q: Cost of Goods Sold, Profit margin, and Net Income for a Manufacturing Company The following…
A: The question is related to Cost Sheet. Cost Sheet is a document which provides a detailed cost…
Q: reate a pro-forma income statement based on the given problem Supply the given items listed…
A: Financial Statements: Financial statements are of three types i.e. Income Statement, Balance Sheet…
Q: How do ‘audits’ work as a corporate governance mechanism
A: Introduction: An audit is an examination or audit by an auditor of various books of accounts,…
Q: An entity is planning to sell the business to new interests. The cumulative net earnings for the…
A: At the time of purchase or acquisition of any business or empire, sometimes amount paid for…
Q: 4. Magsano Company is planning to sell the business to new interests. The accumulative net earnings…
A: Computation of Goodwill if excess earnings are purchased for 5 years: Step 1 - Normal profit =…
Q: Required information E3-18 (Static) Analyzing the Effects of Transactions Using T-Accounts and…
A: calculation of net profit margin ratio are as follows
Q: The following information is available from the current period financial statements: Net income…
A: Introduction: The tasks of a business that are directly connected to supplying goods and/or services…
Q: Besides drawing a written partnership agreement, it is legally possible to start a partnership on…
A: Introduction: Partnership is a one form of business in which two or more person joins hands to carry…
Q: Alt Company purchased a new piece of manufacturing machinery on January 2, 2021. The machine had a…
A: Depreciation means the loss in value of assets because of usage of assets , passage of time or…
Q: The Parent Company purchased common stock of Sub Company in a series of open-market purchases in…
A: The company may purchase shares in another company. The company reports the shares purchased as an…
Q: Data for Finishing Department are as follows: Cost Data: Beginning Work in Process Costs…
A: Multiple part question has been posted, so as per Bartleby policy only first three sub parts are…
Q: When it is impossible to determine whether a change is a change in estimate or a change in policy,…
A: As per relevant accounting rules, accounting policy refers to the type of valuation or method a…
Q: Required Information [The following information applies to the questions displayed below.] Beech…
A: Budgets are prepared to show the financial effect that the activities that the company is planning…
Q: afty Ltd purchased an equipment on 1 July 2019 for $500 000, and its useful life to be five years,…
A: If accounting income is less than taxable income it means we have paid more taxes in current year…
Q: Is if nation in which the nonresident foreign corporation is domiciled permits a credit for taxes…
A: As per section 28(B)(5)(b) of the tax code 1997, The dividend paid by domestic corporations to…
Q: INSTRUCTIONS: Create a pro-forma income statement based on the given problem Supply the given items…
A: Based on the given data we need to classify the the income and expenese based on the above data and…
Q: Partial balance sheet data for Upper Crust Company at August 31 are as follows: Finished goods…
A: Prepaid insurance is usually considered a current asset, as it becomes converted to cash or used…
Q: On January 1, 2022, William Corp. (qualifies as SME) paid cash of P600,000 for all the outstanding…
A: Purchase consideration: Purchase consideration is the amount reimbursed for the shares owned by the…
Q: ABC Traders had the following data for Product Pink on June 20X1: Beginning balance 100 boxes…
A: Perpetual Inventory System – Under the Perpetual inventory system on every sales transaction cost of…
Q: Champion Company purchased and installed carpet in its new general offices on March 31 for a total…
A: Depreciation- In accounting depreciation refers to allocating the cost of assets over their useful…
Q: Required Information [The following information applies to the questions displayed below.] Beech…
A: A budget is a forecast of revenue and expenses for a certain future period of time that is generally…
Q: Net Sales Less Cost sales (cost of \ Good old Grocs Income (profit) Less operating Expense Selling…
A: Return on assets means the amount of return earned by an entity using its assets.
Q: 4. Which of the following costs would not be capitalized? a. Acquisition cost of equipment to be…
A: Meaning : Intangible Assets An intangible assets is an identifiable non-monetary asset without…
Q: Oriole Corporation has 74,000 shares of common stock outstanding. It declares a $2 per share cash…
A: The process of recording business transactions in the books of accounts for the first time is…
Q: June 2022, the directors of BHU Limited announced that the company is ready to receive cations. BHU…
A: A company, being an artificial person, cannot generates it own capital which is necessary to be…
Q: 21.Which of the following best depicts the computation for the carrying amount of an investment in…
A: Investment in associates refers to the investment wherein the investor is not able to fully control…
Q: On Jan. 1, 2022, ABC Co. sold a machinery to XYZ Co. for P1,900,000. Because of the entity's…
A: The lease liability is a sum of all discounted future lease payments. In this case, only lease…
Q: Assume that Concord Corporation received the balance due from Sarasota Co. on January 2 of the…
A: Journal entries : Day to day transactions are recorded in a chronological order is known as journal…
Q: Emil Corp. produces and sells wind-energy-driven engines. To finance its operations, Emil Corp.…
A: The journal entries refer to the process of recording the business transactions on the books for the…
Q: A company reports the following amounts at the end of the year: Total sales revenue = $560,000;…
A: Net revenue is the total amount of gross revenue left after deducting costs, and it is used to cover…
Q: Explain the objectives of governmental financial reporting as developed by GASB
A: The Government Accounting Standard Board (GASB) is defined as an organization that performs the…
Q: pstream Intercompany Merchandise Transactions mmitz Inc. is a subsidiary of Krocker Gear. Jimmitz…
A: Consolidation- Consolidation means combining two or more business organizations or entities into a…
Trending now
This is a popular solution!
Step by step
Solved in 2 steps with 1 images
- Missouri, Connecticut, and Oklahoma have been partners throughout 2021. Their average balances and their balances at the end of the year before closing the nominal accounts are as follows: Partner Average Balances Balances, 12/31/21 Missouri P97,500 P70,000 Connecticut 7,300 11,800 Oklahoma 4,250 1,700 (debit balance) The income for 2021 is P103,500 before charging partners’ salary allowances and before payment of interest on average balances at the agreed rate of 4% per annum. Annual salary allocations are P12,500 to Missouri, P8,750 to Connecticut, and P6,250 to Oklahoma. The balance of the profits is to be allocated at the rate of 60% to Missouri, 10% to Connecticut, and 30% to Oklahoma. It is intended to distribute cash to the partners so that, after credits and allocations have been made as indicated in the preceding paragraph, the balances in the partners’ accounts will be…On January 02, 2019, the business assets and liabilities of Gail Anne & Precious were as follows: Gail AnnePrecious CashP28,000P62,000 Receivables 200,000 600,000 Inventories 120,000 200,000 PPE 650,000 535,000 Other Assets 2,000 3,000 Accounts Payable 180,000 250,000 Notes Payable 200,000 350,000 Gail Anne and Precious agreed to form a partnership by contributing their net assets subject to the following adjustments: ➢ Receivables of P20,000 in Gail Anne’s books and P40,000 in Precious’ books are uncollectible ➢ Inventories of P6,000 and P7,000 in the respective books of Gail Anne and Precious are worthless ➢ Other assets in both books are to be written off ➢ Accrued interest on notes payable equal to 10% is to be established. The note payable of Gail Anne was dated August 01, 2018 while that of Precious, was dated April 01, 2018. The balances of selected accounts after the formation are: Assets…Income summary shows a credit balance of 1,800,000 at the end of the first year of operations.1. By what amount will the capital balance of MAR182 be credited on January 1, 2018?2. By what amount will the capital balance of MAR186 be credited on January 1, 2018?3. How much is the total assets of the partnership at the date of formation?4. What is the net effect of the adjustments made on January 1 to MAR186 capital balance?5. What is the weighted average capital of MAR182 in 2018?6. How much is the bonus given to MAR186?7. How much is the share of MAR182 in the partnership net income?8. How much is the share of MAR186 in the partnership net income?9. What is the ending adjusted capital balance of MAR182?10. What is the ending adjusted capital balance of MAR186?
- AA and BB are partners engaged in a manufacturing business. Transactions affecting the partners’ capital accounts in 2022 are as follows: AA BB Debit Credit Debit Credit Beg. Balance P250,000 P350,000 April 1 150,000 100,000 June 30 125,000 250,000 September 1 225,000 300,000 October 1 350,000 200,000 The income summary has a debit balance of P225,000. Agreement between AA and BB are as follows: Interest on average capital at 8%. Salaries of P125,000 and P175,000 are given to AA and BB, respectively. Bonus to BB at 25% of net income after deducting interest and salaries but before deducting bonus. Balance is to be divided equally. How much is the net increase (decrease) in BB’s capital account in 2022?On December 31, 2021, the GAR Partnership of Garry, Aubrey and Rolly have the following accounts and balances: Garry, Capital(50%), P297,000; Aubrey, Capital (30%), P222,000; Rolly Capital (20%), P195,000; Loans Payable-Aubrey, P72,000; Accounts Receivable-Garry, P36,000; Rolly, Drawing, P36,000. Because of unsuccessful operation for the last 2 years, the partners decided to liquidate after closing the books on December 31, 2021. On this date, the total assets amounted to P1,056,000 including cash of P321,000. During the liquidation process, all the non-cash assets were taken by its competitor. Liabilities were settled, liquidation expenses of P15,000 were paid and the balance was distributed to the partners. Ultimately, Rolly received P125,000 in the final settlement. 9.Determine the amount realized from the sale of non-cash assets. 10.Determine the amount received by Aubrey as return on her capital.Prepare the Statement of Changes in Equity of Camray Traders for the year ended 28 February 2021. The information given below was extracted from the accounting records of Camray Traders, a partnership business with Camy and Raymond as partners. The financial year ends on the last day of February each year. Balances in the ledger on 28 February 2021 Debit Credit R R Capital: Camy 1 200 000 Capital: Raymond 800 000 Current a/c: Camy (01 March 2020) 50 000 Current a/c: Raymond (01 March 2020) 60 000 Drawings: Camy 360 000 Drawings: Raymond 320 000 The following must be taken into account: (a) The net profit according to the statement of comprehensive income amounted to R1 400 000 on 28 February 2021. (b) The partnership agreement made provision for the following: ¦ Interest on capital must be provided at 18% per annum on the balances in the capital accounts. Note: Camy increased her capital by R240 000 on 01 September 2020. Raymond decreased his capital by R120 000 on the same date. The…
- On October 01, 2019, Benny and Joey pooled their resources in a partnership with the firm taking over their business assets and assuming their business liabilities. They agreed to make the following adjustments and to make settlement among themselves to conform to the 40:60 capital and profit and loss ratio. ➢ Joey’s inventory be reduced by P3,000. ➢ Allowance for doubtful accounts be recognized in the amount of P1,500 each. ➢ P4,000 of unrecorded accounts payable to supplier be recorded in the books of Benny ➢ Accrued utilities be recognized in the books of Benny, P1,200. ➢ Store equipment in the books of Joey are under depreciated by P5,000. The individual trial balance before adjustments show the following: BennyJoey AssetsP120,000P150,000 Liabilities 25,000 35,000 Capital 95,000 115,000 The capital balances of the partners that conform with their agreement are: Benny: ___________________Joey: _____________________The information given below was extracted from the accounting records of Britar Traders, a partnership business with Brian and Taryn as partners. REQUIRED Use the information provided to prepare the Statement of Changes in Equity for the year ended 29 February 2020. INFORMATION Extract from the ledger of Britar Traders as at 29 February 2020 Debit Credit R R Capital: Brian 900 000 Capital: Taryn 600 000 Current a/c: Brian (01 March 2019) 50 000 Current a/c: Taryn (01 March 2019) 30 000 Drawings: Brian 350 000 Drawings: Taryn 250 000 The following must be taken into account: 1. On 29 February 2020 the Statement of Comprehensive Incomec reflected, amongst others, the following: Sales R1 200 000 Sales returns R50 000 Net profit R700 000 2. The partners earn interest at 12% p.a. on their capital balances. Note: Brian increased his capital…Love and Faith have been operating an accounting firm as partners for a number of years and at the beginning of 2016, their capital balances were P120,000 and P150,000, respectively. During 2019, Love invested an additional P20,000 on April 1 and withdrew P12,000 on August 30. Faith withdrew P24,000 on May 1 and invested P10,000 on November 1. In addition, Love and Faith withdrew their salary allowances of P36,000 and P42,000, respectively. At year-end 2016 total capital of the Love and Faith partnership was P360,000. Love and Faith share income after salary allowances in a ratio of 55:45. The share of Love on the 2019 net income is
- Purkerson, Smith, and Traynor have operated a bookstore for a number of years as a partnership. At the beginning of 2018, capital balances were as follows: Purkerson $ 86,000 Smith 66,000 Traynor 30,000 Due to a cash shortage, Purkerson invests an additional $12,000 in the business on April 1, 2018. Each partner is allowed to withdraw $900 cash each month. The partners have used the same method of allocating profits and losses since the business's inception: Each partner is given the following compensation allowance for work done in the business: Purkerson, $10,000; Smith, $26,000; and Traynor, $6,000. Each partner is credited with interest equal to 20 percent of the average monthly capital balance for the year without regard for normal drawings. Any remaining profit or loss is allocated 4:2:4 to Purkerson, Smith, and Traynor, respectively. The net income for 2018 is $28,000. Each partner withdraws the allotted amount each month. What are the…Hosea, Riziki and Zarika are trading as Horizon enterprises. They share profits and losses in the ratio of 2:2:1 respectively. The following is the statement of comprehensive income for the partnership for the year ended 31 December 2018: Shs. Shs. Sales Opening stock Purchases Closing stock Gross profit Less: Salaries Repairs and maintenance Interest Goodwill Depreciation Mortgage repayment Insurance Auditee Legal fee Equipment purchase Rent and rates Net profit 300,000 4,000,000 (600,000) 900,000 100,000 480,000 198,000 142,000 200,000 384,220 315,780 100,000 200,000 18,0000 8,000,000 (3700,000) 4,300,000 (3,200,000) 1,100,000 Additional information 1. Opening inventory and closing inventory were overvalued by 30%. 2. Included in interest expense is interest on capital to partners of Sh. 80,000. This amount was to be shared in the profit sharing ratio. The balance of interest relates to an…On January 1, 2021, A and B, both sole proprietors, decided to form a partnership to expand both of their businesses. According to their agreement, they will split profits and losses 75:25 and their initial capital ratio will also reflect that ratio.The following are A and B’s Statements of Financial Position (Attached in the photo): The values reflected in the Statement of Financial Position are already at fair values, except for the following accounts: - A's Accounts Receivable is now 20,000 less than what is stated in his Statement of Financial Position.- Both Inventories of A and B are now 90,000 and 70,000 respectively.- Equipment for B has an assessed value of 275,000, appraised value of 250,000 and book value of 200,000.- Additional accrued expenses are to be established in the amount of 10,000 for B only while additional accounts payable in the amount of 5,000 for A- It is also agreed that all liabilities will be assumed by the partnership, except for the notes payable of B…