Reference no: EM132983808
Problem 1 - Brother and Sister are partners who are changing their profit and loss ratios from 60:40 to 45:55. At the date of change, the partners choose to revaluate assets with market value different from their book values. One asset revalued is land with a book value of P500,000 and a market value of P1,200,000. Two years after the profit and loss ratios are changed, the land is sold for P2,000,000. What is the amount of change in Sister's capital account at the date the land is sold?
Problem 2 - Nichole is a managing partner of a certain partnership. She receives a bonus as part of her profit and loss allocation. Nichole's bonus is based on increase in revenues recorded during the period. The bonus arrangement is that Nichole receives one percent on net income for every full percentage point growth in revenues in excess of a five percent revenue growth. During the most recent period, revenues grew from P1,000,000 to P1,080,000 and the net income grew from P196,000 to P240,000. How much bonus will Nichole receive this period?
Problem 3 - On April 1, 2020, Lana, Brent and Marie formed LBM Partnership with original contributions of P400,000, P100,000 and P500,000, respectively. The articles of co-partnership provides that profit or loss shall be distributed under the following terms:
Lana, Brent and Marie shall be entitled to monthly salaries of P1,000, P2,000 and P3,000 each respectively.
10% return on the original capital contribution.
As managing partner, Brent shall receive bonus equal to 20% of net income after salaries and interest but before bonus.
The remainder shall be distributed on the basis of original capital ratio.
During the year, the partners regularly withdraw 1⁄4 of their monthly salary. The December 31, 2020 statement of financial position of LBM Partnership shows that the capital balance of Lana is P531,080. What is the share of Brent in the partnership net income?
Problem 4 - P, A and L formed a partnership and have average capital balances of P195,000, 246,000 and 294,000 each respectively for 2018. Their articles of co-partnership provide that the operating income be shared among the partners as follows: as salary, P20,000 for P, P22,000 for A, and P15,000 for L; interest of 10% on the average capital during 2018 for the three partners; a 10% bonus to A; and the remainder in the ratio 2:4:4, respectively.
The operating income for the year ending December 31, 2018 after partners' salaries and bonus amount to P105,000.
The partnership agreement also states that L should receive a minimum of P60,000 as his share in partnership operations. What is the net income for the year and the share of P in the net income?
Problem 5 - A, B and C are partners with average capital balances during 2018 of P470,000. P230,000, and P160,000, respectively. The partners receive 10% interest on their average capital balances; after deducting salaries of P120,000 to A and P80,000 to C, the residual profits or loss divided in a 3:2:5 ratio.
In 2018, the partnership had a net loss of P100,000 before the interest and salaries to partners. By what amount should A's and C's capital account change- increase (decrease)?
If the partnership had a loss of P100,000 after the interest and salaries to partners, by what amount should B's capital account change- increase (decrease)?
Problem 6 - Edmund, Harry and Vincent formed a partnership on January 1, 2018. Each contributed P120,000.
Salaries were to be allocated as follows:
Edmund- P30,000
Harry- P30,000
Vincent- P45,000
Drawings were equal to salaries and be taken out evenly throughout the year. With sufficient partnership net income, Edmund and Harry could split a bonus equal to 25% of partnership net income after salaries and bonus (in no event could the bonus go below zero).
Remaining profits were to be divided as follows: 30% for Edmund; 30% for Harry, and 40% for Vincent.
For the year, partnership net income was P120,000. Compute the ending capital for each partner.