40.

A and 13 entered into a partnership as of March 1, 2013 by investing P125,000 and P75,000, respectively, they agreed that A, as the
managing partner, was to receive a salary; P30,000 per year and a bonus computed at 10% of the net profit after adjustment for the salary; the
balance of the profit was to be distributed in the ratio of their original capital balances. On December 31, 2013, account balanc es were as
follows:
Cash
Accounts receivable
Furnitures and fixtures
Sales returns
Purchases
Operating expenses
P 70,000 67,000 45,000 5,000 196,000 60,000
Accounts Payable A, capital B, capital A, drawing B, drawing Sales
P 60,000 125,000 75,000 ( 20,000) ( 30,000) 233,000
Inventories on December 31, 2013 were as follows: supplies, P2,500, merchandise, P73,000, prepaid insurance was P950 while accrued expenses
were P 1,550. De-preciation rate was 20% per year.

The partners' capital balances on December 31, 2013, after closing the net profit and drawing accounts, were:
A a. P135, 940 b. P139,540 c. P139,680 d. P142,350
B P47,960 P49,860 P48,680 P47,670

41. ABC's partnership provided for the following distribution of profits and losses; "First". A to receive 10% of the net income up to P 1,000,000
and 20% on the amount of excess thereof; "Second", B and C each, are to receive 5% of the remaining income in excess of P1,500,000 after A's
share as per above and; "The balance to be divided equally among the partners." For the year just ended, the partnership realized a net income of
P2,500,000 before distribution to partners. The share of A is: a. P1,300,000 b. P1,000,000 c. P1,080,000 d. P1,100,000

42 he partners, A and It, shim!. prof However, A i% to receive • yearly bonus f 20% of the profits, in addition to his profit share The partnership
made a nct income for the year of P24,000 'before the bonus. Assuming A's bonus is COm-plited on profit after deducting said bonus, how much
profit share will Ei receive a. P15,200 b. 9,600 c. P 8,000 d. P 9,000

43. Michelle; an active partner in the Michelle-Esme partnership receive an annual bonuS of 25% of the partnership income after deducting the
bonus. For the year ended, December 31, 2013, partnership income before the bonus amounted to P240,000. The bonus of Michelle for the year
2013 is:

a. P45,000 b. P48,000 c. P80,000 d. P60,000

44. Garcia and Henson formed a partnership on January 2, 2013 and agreed to share profits 90%, 10%, respectively. Garcia contributed capital of
P25,000. Henson contributed no capital but has a specialized expertise and manages the firm full time. There were no withdrawals during the
year. The partnership agreement provides for the following: Capital accounts are to be credited annually with interest at 5% of begining capital.
Henson is to be paid a salary of P 1,000 a month. Henson is to received, a bonus of 20% of income calculated before deducting his salary and
interest on both capital accounts. Bonus, interest, and Henson's salary are to be considered partnership expenses. Thepartnership 2011 income
statement follows:
Revenues Expenses (including salary, interest, and bonus)
Net income
P96,450 49 700 P46,750
26 Practical Accounting - 2
No 44 -- Continued What is Ilenson's 2013 bonus?
a. P11,688 b. P12,000 c. P15,000 d. P1S,738

45. On January 2, 2013, Bueno and Perez formed a partnerhsip. Bueno contributed capital of P175,000 and Perez, P25,000. They agreed to share
profits and 1osses 80% and 20%, respectively. Perez is the general manager and works in the part-nership in full time. Perez is given a salary of
P5,000 a month; an interest of 5% of the starting capital (of both partners) and a bonus of 15% of net profit before the salary, interest and the
bonus.
2017 nap

The condensed statement of comprehensive income of the partnership for the year ended December 31, 2013 is as follows:
Net Sales Cost of Sales
P875,000 700;000
Gross profits on sales P175,000 Expenses (including the salary, interest and the bonus) 143,000
Total comprehensive income
P 32,000
The bonus of Perez in 2013 is:
a. P13,304.35 b. P18,000.00 c. P16,456.00 d. P20,700.00

46. On January 1, 2013, A, B, C and D formed Bekha Ti-ading co., a partnership, with capital contributions as follows: A, P50,000; B, P25,000;
C, P25,000; and D, P2°"°... The partnership contract provided that each partner shall receive a 5% interest ou contributed capital, and that A and
B shall receive salaries of P5,000 and P3' f,„.; respectively. The contract also provided that C shall receive a minimum of P2,''s per annum, and D
a minimum of P6,000 per annum, which is inclusive °fain° ,is representing interest and share of remaining profits. The balance of the P"'" shall be
distributed to A, B. C. and D in a 3:3:2:2 ratio.
•.. II go, ► ..,••11/•■• ... ....,,, • , ....."'"' ie.' .-- , •-' .......-• • 7.... „,,,,,,,. . . . - I- ...-- • m.' ♦ ' • ellei" „ . .., , —..
No. 46— Continued What amount must be earned by the and, salaries, partnership, before any charge for interest es, so that A may receive an
aggregate of P12,500 including interest, salary and share of profits?
Partnerahip 27
a. P16,667 b. P30,000 c. P30,667 d. P32,333

47. Arturo Perez, a partner in the AP Partnership, has a 30% participation in partner-ship profits and losses. Perez's capital account has a net
decrease of P60,000 during the calendar year 2013. During 2013, Perez withdrew P130,000 (charged against his capital account) and contributed
property valued at P25,000 to the part-nership. What was the net income of the AP Partnership for 2013?
a. P150,000 b. P233,333 c. P350,000 d. P550,000
dM

48. K, L, an are partners with average capital balances during 2013 of P472,500, P238,650, and p162,350, respectively. The partners receive 10%
interest on their average capital balances; after deducting salaries of P 122,325 to K and P82,625 to ed M, the residual profits or loss is divid
equally. ip had a net loss of P125,624 before the interest and salaries In 2013, the partnership to partners. By what amount should K's and M's
capital account change? M's Capital Account P31,235 decrease P32,458 increase P17,536 increase P40,448 decrease
K's Capital Account a. P40,844 decrease b. P28,358 increase c. P29,476 increase d. P30,267 increase

49. Henry, Marta and Nestor are partners with avcragy capital 'Wentz* it) M13 tjf P240,000, P120,000 and P80,000 respectively. Paltrier's retzive
10% intatst their average capital balances. Alter deducting salaries of 1'0,000 th P40,000 to Nestor, the residual profit or`loss is divided equally.
In 2W; tht va; ship sustained a P66,000 loss before interest arid salaries to partners, By what amount should Nestor's capital account change?
2017 Mut 'p.a._
a. P3(1,000 decrease b. P22,000 decrease c. P48,000 increase d. P28,000 increase

50. Abe, Bert, and Carl are partners sharing profit on a 7:2:1 ratio. On January 1, 21)13, Dave was admitted into the partrnership with 15% share
in profits. The old pit ners continue to participate in profits in their original ratios.
For the year 2013, the partnership showed a profit of P15,000. However, it was discovered that the following items were omitted in the firm's
book:
Unrecorded at year end
Accrued expense Accr red income Prepaid expenses Unearned income
The share of partner Bert in the 2013 net profit is:
a. P2,197.50 b. P2,490.50 c. P2,637.00 d. P3,149.75
2012 2013
P•1,400 P1,225
P1,051') 875

51. Herm, Mar and Ama formed a partnership on January 1, 2013 and contribwhiled. P 150,000, P200,000 and P250,000, respectively. The
Articles of Co-partners API provides that the operating income be shared among the partners as 1011"tm, salary, for Herm in the amount of
P24,000, for Mar, P18000 and for A rri.a,P12;c1 Interest of 12% on the average capital during 2013 of the three (3) Partners the remainder in the
ratio 2:4:4 respectively.

'H.

4 ,ortit,,,o1

v),000 32,000 11,0(X1 36,000 P139,000

Avorage 1)siv i(1 1504,000 + 12 = P12.090_ I'm Ile- 1360,000 + 12 = P30,000 1 tlintrilmte the profit as follows:
7t)% interest on Average Capital I mv RI, 20% x P42,000 1 1 i r Ile: 20% x P30,000 1 r, clnaUy
Mita
Date January 1 holy 1 August 1
David P 8,400 52,800 P61.200
Capital Balances P280,000 360,000 330,000
Avcragc capital (P3,690,000 + 12) inirtrit (P307,500 x 1090
1 tort Rs, 144,000 (44,000/110%),1 Int, 10,000) x 10%) ies 1 r 4:4:2
A
10,000 6,800 1)16 800
5
3
2
1
12
Partnerghlp
P125,f/i) 10.5/A0 32$/I) 62 ffi) 36,f/A P360,000
Enrile Total
P 6,000 P 14,400 52,800 105600 P58,800 P120,000
Months Unchanged 6
1
5
B
1,000 6,800
Peso Months P1,680,000 360,000 1,650,000 P3,690,000
P 307,500
P 30,750
C p 4,000
12,000 3,400 R19,400
Total P4,000 1,000 22,000 17,000 P44,000

66 Practical Accounting - 2 40, Schedule 1 - Computation and Distribution of Net Profit Net Sales (P233,000 - 5,000) Cost of Sales (P196,000 -
73,000) Expenses: Operating expense Supplies Prepaid insurance Accrued expenses Depreciation (45,000 x 20% x 10/12)
41.
42.

Comprehensive income
Distribution Salary: (P30,000 x 10/12) Bonus: (P39,400 - P25,000) x 10% Remainder, at 5:3
Total
P60,000 ( 2,500) (950) 1,550
P I 23,0o0

P228,000
7,500 65,600 (188,6X}) P 39,400
Total P25,000 1,440 12,960 P39,400
Partners' capital balances, Dec. 31, 2013: Initial investments Share in Profit (Schedule 1) Drawing Dec. 31, 2013 capital balances

To A (P1,000,000 x 10%) (1,500,000 x 20%) To B & C (2,500,000 - 400,000 - 1,500,000 = 600,000 x 5%) Balance, equally Total
A P 100,000 300,000
680,000
P1,080,000
Bonus to A [(P24,000 = 120%) x 20%] Balance, 3:2 Total

B
P 30,000 680,000
P710,000
A P 4,000 12,000
A P 25,000 P 1,440 8,100 P 34,540
B
4,860 P 4,860
A P125,000 P 75,000 34,540 4,860 ( 20,000) ( 30,000) P139,540 P49,860
P 30,000 680,000
Total
P 400,000
60,000 2,040,000
P710,000 P2,500,0
B
8,000 P 8,000
Total P 4,000 20,000 p 24,000

a, casprotemilive income before /kings comprehensive ascagne agar Fkonui (24004 • 125)
Bonus
44, cornpretnnsive income Add salary (Pi /11) x 12 mo.) Intertst (P25/1)0 x 5%) comprehensive income before salary and merest* Divide by
cornpreiv:risive income before sahwy, interest axi bocus Less invfine before salary and interest ,Bon VI to „Henson
*sir= is the s;;_a the &Into is 21JY. before income prase to be used f*-,-
Pannershc17
P240.000 192. • I
P4S alimiams P 46.750 4000 1,250 P 60,000 80% P 75,000 60,000 PL5,0.0
_:-.7=est and and IL..teresz, ?60,000 = • :14 of the . `.be bocus.
43. 7(A.ii1 vonprebensive - & bonus P32,000 Add back; Salanes (P5,0f/J x 12) Interest: B UM) (P175,000 x 5%) P8'!0 Perez (P25,1)00 x 5%)
1,250 10.000 -0,000
46.
P60,000
Total vonprehensive income after bonus (85%) P102,000 Total comprehensive income before bonus (102,000 ÷ 85%) 120.000
Bonut of Perez
Salaries interest Additional profit to give A a total of P12,500 (5,000 + .3(/A) Additional profit to Meet the min i rnum requirement to D Arnount
to be earned
P18,000
Total A B C D P 8,000 P 5,000 P3,000 - 6,000 - 2,500 1,250 1,250 1,0I00 1 6,666 5,000 5,000 3,333 3,333
1,667
1,667 - P32,333 P12,500 P9,250 P4,583 P6,000
47. investment Withdrawals Decrease in capital Net decrease in capital Profit share (30%)
Net income (45,000 + 30%)
4$. 10% interest on average capital balances Salary allowances Balance (deficit), equally
49.
Total
Interest Salaries Balance, equally Total
Total P 44,000 100,000 ( 210,000) P(66,000)
Total
P 87,350 204,950 ( 417,924) P(125,624)
P47,250 P 23,865 122,325 (139,308) ( 139,308) P30,267 P(115,443)
Henry P 24,000 60,000 ( 70,000) P(14,000)
Marta P 12,000
( 70,000) P(58,000)
50. Before computing the share of Bert in the 2013 net profit, the said corrected:
Profit per books, 2013 Unrecorded: Accrued expenses — 2013 Accrued income — 2013 Prepaid expenses — 2012 Unearned income — 2012
Corrected profit, 2013
Bert's share in the 2013 net profit: 17% x P14,650 P2,490.50

P 25,0% 130.060) 105,000 60,000 P 45,000

000
P 16,235 82.625 ( 139,308) P(40,448)
Nestor P 8,00Q 40,000 ( 8Q,000) P(22, 000)
profit must be
P15,000 ( 1,050) 875 ( 1,400 1,225 P14,650

51. 110 conlmi• ;,,,,Ave, 1)1 pal , • din IA ghoul(' be prepared as

follows:
I hi m Mar Ama Total Capital balances, 1 / I /0 13 P1N),000 1 '1(X),( W )0 P250,000 P600,(ff; Additional Investment 10,(X)0 10,000 50,/it)
Drawing ( 10,0(X)) ( 10,0(X0) ( 30,0(X)) ( 50,(00) Net income (sch. 1) 5 ,180 62,060 60,760 176,006 Capital balances, 12/31/013 P223,180
1'272,060 1'280,760 P776,000 Schedule 1 - Distribution o/ Net Income: Salaries P 24,000 P 18,000 P 12,000 P 54,000 Interest (Sch. 2) 19,500
24,700 29,400 73,600 Remainder, 2:4:4 9,680 19,36() 19,360 48,400 Total P 53,180 P 62,060 P 60,760 P176,000
Schedule 2 - Computation of Interest: Herm: P150,000 x 12% x 6/12 = P 9,000 180,000 x 12% x 3/12 = 5,40() 170,000 x 12% x 3/12 = 5,100 P
19,500
Total Mar. Total Ama: Total
200,000 x 12% x 7/12 = 14,000 220,000 x 12% x 2/12 = 4,400 210,000 x 12% x 3/12 = 6,300 P24,700
250,000 x 12 x 10/12 = 25,0(X) 220,000 x 12 x 2/12 = 4,400 P29,400 a