Andrea Arce

Sheila Mae Benedicto

Dinar Yen Brunos
Hazel Kaye Malda
Jerah Torrejos
ACP 311 (2960)
Prof. Lolita Apatan, CPA

PROBLEM 1
1 Sales 8,000.00
Beginning Inventory 1,000.00
Freight In 50.00
Purchases 2,500.00
Less: Ending Inventory 300.00 3,250.00
Gross Profit 4,750.00
Less: Operating Expenses 550.00
NET PROFIT 4,200.00

2 NET PROFIT X Y Z
1/3 1/3 1/3
4,200.00 1,400.00 1,400.00 1,400.00

3 Additional Inventory 500.00

Operating Expenses 550.00
Y Share in Profit 1,400.00
TOTAL 2,450.00

4 Inventory 1,000.00
Freight 50.00
X Share in Profit 1,400.00
X CAPITAL 2,450.00
 RECEIPTS
Additional Inventory 500.00 Cash 2,000.00
Operating Expenses 550.00 Z Share in Profit 1,400.00
Y Share in Profit 1,400.00 Unsold Inventory (300.00)
Y CAPITAL 2,450.00 Z CAPITAL 3,100.00

5 Cash Sales 8,000.00

Unsold Inventory 300.00
Total Purchases (3,550.00)
Expenses (550.00)
JOINT OPERATION 4,200.00

6 NET PROFIT X Y Z
1/3 1/3 1/3
4,200.00 1,400.00 1,400.00 1,400.00

7 X Y Z
INVESTMENT 1,050.00 1,050.00 2,000.00

8 X Y Z
Investment 1,050.00 1,050.00 2,000.00
Share in Profit 1,400.00 1,400.00 1,400.00
BALANCES 2,450.00 2,450.00 3,400.00

PROBLEM 2
YEAR PROFIT INTEREST JV's SHARE IN PROFIT BEFORE ADJUSTMENT
1 2019 1,000,000.00 20% 200,000.00
2020 1,500,000.00 20% 300,000.00

2 Sales 100,000.00
Gross Profit Rate 50%
Unrealized Profit 50,000.00
Tax 70%
 2019 Unrealized Profit 35,000.00
2020 Unrealized Profit 0 (The goods have been sold so there's no unrealized profit)

3 Sales 100,000.00
Gross Profit Rate 50%
Unrealized Profit 50,000.00
Tax 70%
2020 Realized Profit 35,000.00
2019 Realized Profit 0 (The goods are still in Inventory thus no profits were realized)

4 YEAR SHARE IN PROFIT UNREALIZED PROFIT REALIZED PROFIT ADJUSTED SHARE IN PROFIT
2019 200,000.00 (35,000.00) - 165,000.00
2020 300,000.00 - 35,000.00 335,000.00

PROBLEM 3
YEAR PROFIT INTEREST NOLA'S SHARE IN PROFIT BEFORE ADJUSTMENT
1 2019 1,200,000.00 20% 240,000.00
2020 1,000,000.00 20% 360,000.00

2 Ending Inventory 100,000.00

Mutiply by: Gross Profit Rate 50%
Unrealized Profit 50,000.00
Multiply by: Tax Rate 70%
Unrealized Profit after Tax 35,000.00
Nola's Interest 20%
2019 Unrealized Profit 7,000.00
2020 Unrealized Profit 0

3 YEAR NOLA'S SHARE IN PROFIT BEFORE ADJUSTMENT NOLA'S ADJUSTED SHARE IN PROFIT
2019 240,000.00 233,000.00
2020 360,000.00 367,000.00