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Partnership Operation Practice Problems PDF

Here are the key steps and calculations to solve this comprehensive partnership problem: 2018: - J salary: P96,000 - M salary: P48,000 - Interest on capital: - J: P8,000 (10% of P80,000) - M: P4,000 (10% of P40,000) - Net loss: P6,000 - Loss allocation based on beginning capital: - J: 80/120 of P6,000 = P4,000 - M: 40/120 of P6,000 = P2,000 - Withdrawals: - J: P4,000 - M: P4,

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Meleen Tadena
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2K views

Partnership Operation Practice Problems PDF

Here are the key steps and calculations to solve this comprehensive partnership problem: 2018: - J salary: P96,000 - M salary: P48,000 - Interest on capital: - J: P8,000 (10% of P80,000) - M: P4,000 (10% of P40,000) - Net loss: P6,000 - Loss allocation based on beginning capital: - J: 80/120 of P6,000 = P4,000 - M: 40/120 of P6,000 = P2,000 - Withdrawals: - J: P4,000 - M: P4,

Uploaded by

Meleen Tadena
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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Partnership

Operation- Practice
Problems

ACP 311- Accounting for Special Transactions


JMF, CPA
Answer
CC, PP, AA, Accountants, agree to form
a partnership and to share profits in the
ratio of 5:3:3. They also agreed that AA
is to be allowed a salary of P28,000, and
that PP is to be guaranteed P21, 000 as
his share of the profits. During the first
year of operation, income from fees are
P180, 000, while expenses total P96,
000. What amount of net income
should be credited to each partner’s
capital account? Income from Fees 180, 000
Expenses 96, 000
Net Income 84, 000
The Partnership contract for the
Anthony and Davis Partnership Answer
provided that Anthony is to receive an
annual salary of 120, 000 and Davis for Anthony Davis Total
80, 000, and the remaining profit or loss Annual salary 120,000 80,000 200,000
is to be divided equally. Net income of Balance, equally (  10,000) ( 10,000) (  20,000)
Total P110,000 P 70,000 P180,000
the partnership for the year ended
December 31, 2019 was 180, 000. The
closing entry is a debit to Income Income Summary 180, 000
Summary for 180, 000 and credit to Anthony, Capita; 110, 000
Anthony Capital and Davis Capital, Davis, Capita; 70, 000
respectively of:
Black and Panther formed a
Partnership on January 1, 2019 with
Black contributing 16,000 cash and Answer
Panther contributing equipment with a
book value of 6,400 and fair value of
4,800 and inventory items with BV of
2,400 and FV of 3,200. During 2019,
Black made additional investment of 1,
600 on April 1 and 1,600 on June 1 and
on September 1, he withdrew 4,000.
Panther had no additional investments
nor withdrawal during the year. The
Partnership net income was 150, 000
and was agreed distributed based on
its WA capital balances. How much is
Black’s share in the net income?
JPIA, JAAT and DySAS are partners in
DAE Partnership. Their capital account
balances at December 31, 2019 were
90, 000, 110, 000 and 50, 000 Answer
respectively. They share profits in 4:4:2 JPIA JAAT DySAS Total
ratio, after the following terms: Bonus to CJ – – P4,000* P4,000
Interest to BJ – P1,000 – 1,000
a. DySAS is to receive a bonus of 10% Salaries 10,000 – 12,000 22,000
of the net income after bonus. Balance, 4:4:2 6,800 6,800 3,400 17,000
Total P 16,800 P7,800 P19,400 P44,000
b. Int. of 10% shall be paid on that
portion of partner’s capital in *Computation of Bonus
excess of 100, 000.
c. Salaries of 10,000 and 12,000 shall Net profit before S, I and bonus P44,000
Net profit after bonus (P44,000/110%)` 40,000
be paid to partners JPIA and 4, 000
DySAS, respectively.

The income of the partnership was 44,


000. What is the profit share of DySAS?
Tony and Jane are partners with
Answer
capitals of P200, 000 and P120,000,
respectively. The partnership
agreement provided the following:
a. 10% interest on their capital
investment.
b. Annual salary of P36, 000 to Tony.
c. Remainder in 60:40 to Tony and
Jay.
What is the profit to be earned by
partnership before charges for interest,
salary and the balance, so that Jane will
receive 40, 000 in the remainder of the
profit after salary and interest?
Peter and Paul formed a partnership on January
2, 2019, and agreed to share net income and
losses 90% and 10%, respectively. Peter invested
no assets but had a specialized expertise and
managed the firm full time. The contract Answer
provided the following:
a. Partners’ capital accounts are to be
credited annually with interest at 5% of
beginning capital account balances.
b. Paul is to be paid a salary of 10, 000 per
month.
c. Paul is to receive a 20 percent bonus
before S, I and Bonus.
d. Bonus, Interest and Salary is considered as
expenses

Additional Data:
Revenue 964, 500
Expenses (Including S, I & B) (497, 000)
Net Income 467, 500

What is Paul’s Bonus on 2019?


Kyle and Alex co share profits after the
provision of annual salary allowances
of 14, 400 and 13, 200 respectively in
the ratio of 3:2. However, if partnership’s Answer
net income is insufficient to provide for
said allowances in full amount , the net
income shall be divided equally
between the partners. In 2019, the
following errors were discovered
:Depreciation for 2019 is understated by
P2,100 and the inventory on December
31, 2019 is overstated by P11,400. The
partnership net income for 2019 was
reported to be P19, 500.

The capital accounts of the partners


should be increased (decreased) by:
Comprehensive Problem

On January 2, 2018 JM Partnership begins its operations with the following:

J P80, 000
M 40, 000

According to the partnership agreement, all profits will be distributed as follows:


a. J will be allowed a monthly salary of 8, 000 with 4, 000 assigned to Tom.
b. The partners will be allowed with interest equal to 10% of the capital balance as of
the first day of the year.
c. J will be allowed a bonus of 10% of the net income after bonus
d. The remainder will be divided on the basis of the beginning capital for the first year
and equally for the second year.
e. Each partner is allowed to withdraw up to 4, 000 a year.

Partners operation results in net loss of P6, 000 in 2018 and a profit of P22, 000 in 2019.
Each partner withdraws the maximum amount each year. What is the capital balance of J
on December 31, 2018 and 2019?

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