Requirement: A new set of books will be opened by the partnership
Roces' Books
Adjusting Entries
2016 2016
Jan. 1 Merchandise inventory 8,000 Jan. 1
Goodwill 40,000
Accumulated depreciation - Fixtures 16,000
Allowances for bad debts 1,600
Roces, Capital 62,400
To adjust the assets of Roces
Jan. 1
Closing the Books of Roces
Jan. 1 Allowances for bad debts 1,600
Accumulated depreciation - Delivery Equipment 12,800
Accumulated depreciation - Fixtures 64,000
Accounts payable 104,000
Accrued taxes 6,400
Roces, Capital 224,000
Cash 14,400
Accounts Receivable 57,600
Merchandise Inventory 132,800
Delivery Equipment 19,200
Fixtures 144,000
Prepaid Insurance 4,800
Goodwill 40,000
To close all the adjusted balances of the accounts
New Books of the Partnership
2016 2016
Jan 1. Cash 14,400 Jan 1.
Accounts Receivable 57,600
Merchandise Inventory 132,800
Delivery Equipment 6,400
Fixtures 80,000
Prepaid Insurance 4,800
Goodwill 40,000
Allowances for bad debts 1,600
Accounts payable 104,000
Accrued taxes 6,400
Roces, Capital 224,000
To record the investment of Roces
Sales' Books
Adjusting Entries
Goodwill 32,000
Accumulated depreciation - Fixtures 3,200
Sales, Capital 28,800
To adjust the assets of Sales
Closing the Books of Sales
Allowances for bad debts 12,800
Accumulated depreciation - Delivery Equipment 8,000
Accumulated depreciation - Fixtures 91,200
Accounts payable 64,000
Notes payable 40,000
Accrued taxes 8,000
Sales, Capital 224,000
Cash 4,800
Accounts Receivable 72,000
Merchandise Inventory 192,000
Delivery Equipment 48,000
Fixtures 96,000
Prepaid Insurance 3,200
Goodwill 32,000
To close all the adjusted balances of the accounts
he Partnership
Cash 4,800
Accounts Receivable 72,000
Merchandise Inventory 192,000
Delivery Equipment 40,000
Fixtures 4,800
Prepaid Insurance 3,200
Goodwill 32,000
Allowances for bad debts 12,800
Accounts payable 64,000
Notes payable 40,000
Accrued taxes 80,000
Sales, Capital 224,000
To record the investment of Sales
The capital accounts of Castro and Diaz for the fiscal year ended December 31, 2016:
2016 Castro 2016
Jan. 01 Balance ₱ 26,000 Jan. 01
Mar. 30 Investment 3,000 May. 18
May. 10 Investment 7,000 Aug. 24
Jul. 25 Withdrawal 4,000 Dec. 31
Dec. 31 Balance ₱ 32,000
Profit 23800
Requirement/s:
2 Castro
Jan. 01 Balance ₱ 26,000 0.25 ₱ 6,500
Mar. 30 Investment 29,000 0.11 3,222
May. 10 Investment 36,000 0.21 7,500
Jul. 25 Withdrawal 32,000 0.43 13,778
Average Capital ₱ 31,000
Diaz
Jan. 01 Balance ₱ 16,500 0.38 ₱ 6,325
May. 18 Investment 21,500 0.27 5,733
Aug. 24 Withdrawal 19,500 0.35 6,825
Average Capital ₱ 18,883
Total Average Capital ₱ 49,883
Castro Diaz
Profit ₱ 23,800 ₱ 23,800
Multiply: Fraction 0.62 0.38
Share in Profit ₱ 14,791 ₱ 9,009
3 Profit
Castro Diaz Total ₱ 23,800
Interest (24% of average
₱ 7,440 ₱ 4,532 ₱ 11,972 ₱ 11,828
capital of the partners)
Salaries 36,000 24,000 60,000 - 48,172
Balance to partners (divided
equally) - 24,086 - 24,086 - 48,172 0
Share in Profit ₱ 19,354 ₱ 4,446 ₱ 23,800
4 Profit
Castro Diaz Total ₱ 23,800
Bonus (25%)* ₱ 4,760 ₱ - ₱ 4,760 19,040
Interest (10% on the excess of
the average capital of one
partner over the other)* 1,100 - 1,100 17,940
Interest (10% on the excess of
the average capital of one
partner over the other)* 1,100 - 1,100 17,940
Balance to partners (3:2)
Share in Profit ₱ 10,764 ₱ 7,176 ₱ 17,940 ₱ -
*Bonus
Let x for Bonus
Bonus=Bonus rate (Net
Income - Bonus)
x = 25% (23800 - x)
x = 5,950 - .25x
1.25x/1.25 = 5,950/1.25
x = 4,760
*Interest Castro Diaz Excess
Simple Average = 29000
(26,000+32,000)/2
Simple Average = 18000
(16,500+32,000)/2
Excess 11000
Multiply: Interest rate 0.1
Interest for Castro 1100
5 Profit
Castro Diaz Total ₱ 23,800
Salaries (C=3/5; D=2/5) ₱ 14,280 ₱ 9,520 ₱ 23,800 0
Share in Profit ₱ 14,280 ₱ 9,520 ₱ 23,800
cember 31, 2016:
Diaz
Balance ₱ 16,500
Investment 5,000
Withdrawal 2,000
Balance ₱ 19,500
Cebedo, Basa and Ibrahim
Statement of Financial Position
July 10, 2012
Assets Liabilities and Partners' Capital
Cash ₱ 74,000 Liabilities
Trade Accounts Receivable (net) 36,000 Cebedo, Capital
Plant Assets (Net) 135,000 Basa, Capital
Goodwill (net) 30,000 Ibrahim, Capital
Total ₱ 275,000 Total
Requirement/s:
1
ners' Capital
₱ 45,000
120,000
60,000
50,000
₱ 275,000
