Financial Accounting: Information for Decisions
8th Edition
ISBN: 9781259533006
Author: John J Wild
Publisher: McGraw-Hill Education
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developed in part a(3).
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PROBLEM C.11 Dividing Partnership Profit and LossLOC-10
Rothchild Furnishings, Inc., has three partners-Axle, Brandt, and Conrad. At the beginning of the
current year their capital balances were: Axle, $180,000; Brandt, $140,000; and Conrad, $80,000.
The partnership agreement provides that partners shall receive salary allowances as follows: Axle,
$10,000; Brandt, $50,000; and Conrad, $28,000. The partners shall also be allowed 12 percent
interest annually on their capital balances. Residual profit or loss is to be divided: Axle, one-half;
Brandt, one-third; and Conrad, one-sixth.
Instructions
Prepare separate schedules showing how income will be divided among the three partners in each of
the following cases. The figure given in each case is the annual partnership net income or loss to be
allocated among the partners. Round calculations to the nearest dollar.
a. Income of $526,000.
b. Income of $95,000.
c. Loss of $32,000.
PROBLEM C.12 Who…
Question 3
X, Y and Z are partners in XYZ partnership. X and Y contributed P10,000 each while Z contributed his service. After payment of the partnership liabilities to creditors, only P15,000 remains. In the absence of stipulation to the contrary the share of Z shall be:
a. P5,000.00
b. P10,000.00
c. P3,000.00
d. Zero
Problem 2: Statement of Changes in Equity - Partnership
The following are taken from the accounting records of JFK Partnership.
December 31, 2020
December 31, 2021
James, Capital
P54,900
P64,900
Christine, Capital
53,200
63,900
Lolly, Capital
44,890
50,890
The partnership generated net income of P51,600 in 2020. According to the partnership
contract, James, Christine and Lolly share profit and loss equally. The partnership
contract allows each partner to withdraw P1,000 monthly. James and Christine each
contributed P5,000 during the year. Loll did not make any contributions during the
year.
Required:
1. Prepare the partnership's Statement of Changes in Equity.
2. Determine if any of the partners violated the partnership contract provision on
Drawings. Identify who among the partners it is.
Chapter D Solutions
Financial Accounting: Information for Decisions
Ch. D - Prob. 1DQCh. D - Prob. 2DQCh. D - Prob. 3DQCh. D - Prob. 4DQCh. D - Prob. 5DQCh. D - Prob. 6DQCh. D - Prob. 7DQCh. D - Prob. 8DQCh. D - Prob. 9DQCh. D - Prob. 10DQ
Ch. D - Prob. 11DQCh. D - Prob. 12DQCh. D - Prob. 1QSCh. D - Prob. 2QSCh. D - Prob. 3QSCh. D - Prob. 4QSCh. D - Prob. 5QSCh. D - Prob. 6QSCh. D - Prob. 7QSCh. D - Prob. 8QSCh. D - Prob. 1ECh. D - Prob. 2ECh. D - Prob. 3ECh. D - Prob. 4ECh. D - Prob. 5ECh. D - Prob. 6ECh. D - Prob. 7ECh. D - Prob. 8ECh. D - Prob. 9ECh. D - Prob. 10ECh. D - Prob. 11ECh. D - Prob. 12ECh. D - Prob. 1PSACh. D - Prob. 2PSACh. D - Prob. 3PSACh. D - Prob. 4PSACh. D - Prob. 5PSACh. D - Prob. 1PSBCh. D - Prob. 2PSBCh. D - Prob. 3PSBCh. D - Prob. 5PSBCh. D - Prob. 3BTN
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- Liquidating Partnerships—Capital Deficiency Lewis, Zapata, and Fowler share equally in net income and net losses. After the partnership sells all assets for cash, divides the losses on realization, and pays the liabilities, the balances in the capital accounts are as follows: Lewis, $42,000 Cr.; Zapata, $92,400 Cr.; Fowler, $26,900 Dr. Question Content Area a. What term is applied to the debit balance in Fowler's capital account? b. What is the amount of cash on hand?$fill in the blank d6b98c033f9b06a_2 Question Content Area c. Journalize the transaction that must take place for Lewis and Zapata to receive cash in the liquidation process equal to their capital account balances. If an amount box does not require an entry, leave it blank. blankarrow_forwardHelp me pleasearrow_forwardSupposing that the old partnership of A & B reported the following: Partners Capital Profit and loss ratio A P200,000 40% B 300,000 60% If C is to be admitted for 20% interest in the partnership by investing P125,000, then the new profit and loss ratio of A & B, respectively, in the new partnership, without specific agreement would be A. 60% 40% B. 32% 48% C. 40% 60% D. 48% 32%arrow_forward
- Who will receive the proceeds from the sale? Answer: 3 How much is the personal gain or loss assuming that Jamili pays Abuzo for P200,000? Answer: 4. How much is the capital credit of Jamili upon admission? Answer: 5. Assuming, Jamili pays Abuzo in the amount of P170,000, how much is the personal gain or loss of Abuzo? Answer:arrow_forward2. The capital balances of partners Po and Gi are as follows:Po GiJanuary 1, Beginning P100,000 P200,000June 30, investment 50,000 -September 30, withdrawal - (100,000)Balance P150,000 P100,000Their agreement is to share profit and loss based on average capital balance. How muchis the share of Gi in the partnership’s income of P450,000?arrow_forwardQUESTION 1 Mweemba and Phiri are in partnership sharing profits and losses in the ratio 7:3 respectively. The following information has been taken from the partnership records for the year ended 31 May 2020. Partners' capital account Mweemba k200,000 Phiri k140,000 Partners' current accounts, balances as at 1 June 2019: Mweemba K15, 000 Cr Phiri K13, 000 Cr During the year ended 31 May 2020 the partners made the following withdrawals from the partnership bank account. Mweemba Phiri k10, 000 on 31 August 2019 K10, 000 on 30 November 2019 K10, 000 on 28 February 2020 K10, 000 on 31 May 2020 k7, 000 on 31 August 2019 K7,000 on 30 November 2019 K7,000 on 28 February 2020 K7,000 on 31 May 2020 Interest is to be charged on withdrawals at the rate of 12% per annum. Interest is allowed on capital accounts and credit balances on current accounts at the rate of 12% per annum. Phiri is to be allowed a salary of k15, 000 per annum. The Net profit of the partnership for the year ended 31 May 2020…arrow_forward
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