Bryle Jay P.

Lape BSA-III

Activity 1. Partnership Formation

Books of Roces

Adjusting Entries:
Accumulated Dep’n - Fixtures 16,000
Merchandise Inventory 8,000
Goodwill 40,000
Allowance for bad debts 1,600
Roces, Capital 62,400
To adjust the assets and contra asset accounts of Roces.
Closing Entries:
Accounts Payable 104,000
Accrued Taxes 6,400
Allowance for bad debts 1,600
Accumulated Dep’n - Delivery equipment 12,800
Accumulated Dep’n - Fixtures 64,000
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 accounts of Roces.
Books of Sales

Adjusting Entries:
Goodwill 32,000
Accumulated Dep’n. - Fixtures 3,200
Sales, Capital 28,800
To adjust the assets and contra asset accounts of Sales.
Closing Entries:
Accounts Payable 64,000
Notes Payable 40,000
Accrued Taxes 8,000
Allowance for bad debts 12,800
Accumulated Dep’n - Delivery equipment 8,000
Accumulated Dep’n - Fixtures 91,200
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 accounts of Sales.
New Partnership Books
 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
Accounts Payable
64,000
Notes Payable
40,000 8,000
Accrued Taxes
12,800
Allowance for bad debts
8,000
Accumulated Dep’n - Delivery equipment
91,200
Accumulated Dep’n - Fixtures
224,000
Sales, Capital
To record investments of Sales.

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
Accounts Payable 104,000
Accrued Taxes 6,400
Allowance for bad debts 1,600
Accumulated Dep’n - Delivery equipment 12,800
Accumulated Dep’n - Fixtures 64,000
Sales, Capital 224,000
To record investments of Roces.
Activity 2. Partnership Operation.

Requirement 2.

Castro: (P31,250/P50,000) x P23,800 = P 14,875.00

Diaz: (P18,750/P50,000) x P23,800 = P 8,925.00

Investments Capital
Average
Date and Account Fraction
Capital
Withdrawals Balance
Castro: 01-Jan 26,000.00 26,000.00 3/12 P 6,500.00
01-Apr 3,000.00 29,000.00 1/12 2,417.00
01-May 7,000.00 36,000.00 3/12 9,000.00
01-Aug -4,000.00 32,000.00 5/12 13,333.00
12 P 31,250.00
 Investments Capital
Average
Date and Account Fraction
Capital
Withdrawals Balance
Diaz: 01-Jan 16,500.00 16,500.00 5/12 P 6,875.00
01-Jun 5,000.00 21,500.00 3/12 5,375.00
01-Sep 2,000.00 19,500.00 4/12 6,500.00
12 P 18,750.00

Requirement 3.

Castro Diaz Total

Interest P 7,500.00 P 4,500.00 P 12,000.00
Salaries 36,000.00 24,000.00 60,000.00
Balance, equally -24,100.00 -24,100.00 -48,200.00
Total P 19,400.00 P 4,400.00 P 23,800.00

Requirement 4.

Castro Diaz Total

Bonus P 4,760.00 P - P 4,760.00
Interest 1,100.00 - 1,100.00
Balance (3:2 ratio) 10,764.00 7,176.00 17,940.00
Total P 16,624.00 P 7,176.00 P 23,800.00

Bonus: Net Profit before Bonus P 23,800.00

Net Profit after Bonus ( 23,800/125 ) 19,040.00
Bonus P 4,760.00

Interest: Ave. Capital of Castro (26,000 + 32,000) / 2 P 29,000.00

Ave. Capital of Diaz (16,500 + 18,500) / 2 18,000.00
Castro's Excess 11,000.00
Multiply by 10%
Interest P 1,100.00

Requirement 5.

Castro: (P3,000/P5,000) x P23,800 = P 14,280.00

Diaz: (P2,000/P5,000) x P23,800 = P 9,520.00
P 23,800.00

Activity 3. Partnership Dissolution.

D. Cash 300,000
Aguilar, Capital 90,000
A.Sustrina,
Aguilar,Capital
Capital (450,000 x 20%) 30,000
90,000
Bigalbal, Capital
Pascual, Capital 60,00090,000
ToPascual,
record Capital
admission of Pascual. 480,000
To record investment of Pascual for 40% interest in the
Partnership and the bonus to new partner.
B. Cash 200,000
Pascual, Capital 200,000
To record the investment of Pascual.
Cont. Capital Bonus Agreed Capital
C. Cash 300,000
Aguilar, Capital 30,000
Sustrina, Capital 10,000
Bigalbal, Capital 20,000
Pascual, Capital 240,000
To record investment of Pascual for 20% interest in the
Partnership and the bonus to existing partners.

Aguilar 450,000.00 30,000.00 480,000.00

Sustrina 150,000.00 10,000.00 160,000.00
Bigalbal 300,000.00 20,000.00 320,000.00

Total 900,000.00 60,000.00 960,000.00

Pascual 300,000.00 -60,000.00 240,000.00

Total 1,200,000.00 - 1,200,000.00

Computation of Bonus:
Total Contributed Capital x 20%
1,200,000 x 20% 240,000.00 (Pascual's Agreed Capital)
Pascual Contributed Capital -300,000.00
Bonus to old partners -60,000.00

Distribution of bonus:
Aguilar (60,000 x 45/90) 30,000.00
Sustrina (60,000 x 15/90) 10,000.00
Bigalbal (60,000 x 30/90) 20,000.00

Cont. Capital Bonus Agreed Capital

 Aguilar 450,000.00 -90,000.00 360,000.00
Sustrina 150,000.00 -30,000.00 120,000.00
A. Ibrahim, Capital
Bigalbal 300,000.00 -60,000.00 50,000 240,000.00
Cebedo, Capital
2,400
Basa, Capital
Total 900,000.00 -180,000.00 1,600720,000.00
Cash
54,000
To Pascual
record withdrawal of Ibrahim with bonus
300,000.00 from
180,000.00 480,000.00
partners.
Total 1,200,000.00 - 1,200,000.00
Distribution of bonus:
Cebedo, Capital (4,000 x 3/5) = 2,400
Basa, Capital
Computation (4,000 x 2/5) = 1,600
of Bonus:
Total Contributed Capital x 40%
1,200,000 x 40% 480,000.00 (Pascual's Agreed Capital)
B. Ibrahim, Capital
Pascual
Cebedo,Contributed
Capital Capital -300,000.00 50,000
Basa, Capital 3,000
Bonus to old partners 180,000.00
Cash 2,000
To record withdrawal of Ibrahim with bonus to 45,000
partners.
Distribution of bonus:
Distribution
Aguilar of bonus:x 45/90)
(180,000 90,000.00
Cebedo, Capital (5,000 x 3/5) = 3,000
Sustrina (180,000 (5,000
Basa, Capital x 15/90) 30,000.00
x 2/5) = 3,000
Bigalbal (180,000 x 30/90) 60,000.00

C. Ibrahim. Capital 50,000

Cebedo, Capital 1,500
Basa, Capital 1,000
Plant Assets (net) 12,000
Cash 40,500
Activity
To 4. Partnership
record Dissolution.
the withdrawal of Ibrahim.

Cebedo Basa Ibrahim

Balances prior to withdrawal P 120,000.00 P 60,000.00 P 50,000.00
Payment to Ibrahim:
Cash -40,500.00

Plant Assets (worth

E. Aguilar, Capital30,000; 450,000 -12,000.00
60%Sustrina,
depreciated), net of:(75,000 x 15/45)
Capital 25,000
Bigalbal, Capital (75,000 x 30/45) 50,000
Loss onCash
Disposal: 525,000 -2,500.00
Cebedo (3/5
To recordx 2,500)
retirement of Aguilar. -1,500.00 1,500.00
Basa (2/5 x 2,500) -1,000.00 1,000.00
Balances after
F. Aguilar, Withdrawal
Capital P 118,500.00 P 59,000.00
200,000 P -
Pascual, Capital 200,000
To record retirement of Aguilar.