PROBLEM SOLVING:

a 1 On January 1, 2021, Angel, Bea and Colleen formed a partnership with original capital contribution ratio
of 4:5:1 for total agreed capitalization of P 5,000,000. The profit and loss ratio agreement provides that
profits shall be distributed in the ratio of 3:2:5 while losses shall be distributed in the ratio of 6:1:3

During 2021, the partnership reported net income of P 2,000,000 with Angel and Bea withdrawing
P 500,000 and P 300,000 respectively. During 2022, the partnership reported net loss of P 1,000,000
with Bea and Colleen withdrawing P 200,000 and P 400,000 respectively.

What is the capital balance of Bea on December 31, 2022?

a P 2,600,000 b. P 2,300,000 c P 2,500,000

Computation:
90% 40% 50%
Total Angel Bea
Capital 5,000,000 2,000,000 2,500,000
Loss 1,000,000 400,000 200,000
Capital Bal,2022
4,000,000 1,600,000 2,300,000

c 2. On January 1, 2021, Kobe, Lebron and Michael formed a partnership with respective capital contribution
of P 2,000,000, P 5,000,000 and P 3,000,000. The articles of co-partnership provides that profits or loss
shall be distributed accordingly:
> 20% interest on original capital contribution
> P 30,000 monthly salary for Kobe and P 50,000 monthly salary for Michael
> The remainder shall be distributed on the basis of original capital contribution ratio
On December 31, 2021, Kobe and Lebron made withdrawals of P 500,000 and P 1,000,000, respectively.
The statement of financial position of the partnership shows that Lebron's capital on December 31, 2021
is P 6,500,000.

What is the capital balance of Kobe on December 31, 2021?

a P 3,260,000 b. P 2,100,000 c P 2,360,000

Computation:

Total Kobe Lebron

Capital 7,000,000 2,000,000 5,000,000
Withdrawals 1,500,000 500,000 1,000,000
Salary 1,860,000 360,000 1,500,000
Additional bal.3,000,000 1,000,000 1,000,000
Capital Bal,2021
9,360,000 2,860,000 6,500,000

b 3. On January 1, 2017, Klay and Steph formed Splash Brother Partnership organized to train prospective
professional basketball players on how to shoot 3-pointer with splash. The articles of co-partnership
provides that profit or loss shall be distributed accordingly:
> 10% interest on average capital balance
 > P 50,000 and P 100,000 quarterly salary for Klay and Steph, respectively
> The remainder shall be distributed in the ratio of 3:2 for Klay and Steph, respectively

The following transactions regarding the capital balance of the partner for year 2017 are provided:
Klay, Capital
January 1, 2017 Investment P 1,000,000
March 31, 2017 Investment
July 1, 2017 Withdrawal (200,000)
Sept. 30, 2017 Withdrawal
October 1, 2017 Investment 700,000

The chief accountant of the partnership reported net income of P 1,000,000 for year 2017.

What is the capital balance of Klay on December 31, 2017?

a P 1,951,000 b. P 1,451,000 c P 2,151,500
Computation:
Klay
Investment 1,000,000
Withdrawal (200,000)
Salary 700,000
Additional bal. 451,500
Capital Bal,2017 1,951,500

d 4. On July 1, 2018, Drumond and Jordan formed Free-Throw Partnership organized to train professional
basketball players on how to shoot Charity Shot without accuracy with initial investment of P 1M and
P 2M respectively. Drumond is appointed as the managing partner.

The articles of co-partnership provides that profit or loss shall be distributed accordingly
> 30% interest on original capital contribution ratio
> Monthly salary of P 20,000 and P 10,000 respectively for Drumond and Jordan
> Drumond shall be entitled to bonus equivalent to 20% of the net income after interest
salary, and bonus
> The remainder shall be distributed in ratio of 3:2 of net income after interest, salary and
bonus

What is the share in net income of Drumond for the year ended December 31, 2018?
a P 400,000 b. P 250,000 c P 350,000

Computation:
Total Drumond Jordan
Interest 450,000 150,000 300,000
Salaries 180,000 120,000 60,000
Bonus 20,000 20,000 0
Remainder 100,000 60,000 40,000
Net income 750,000 350,000 400,000
d 5. Using the same data in No. 4, what is the share in net income of Jordan, assuming the bonus is equivalent
to 20% of net income after interest and salary but before bonus for the year ended December 31, 2018?
a P 351,600 b. P 398,400 c P 350,000

Computation:
Total Drumond Jordan
Interest 450,000 150,000 300,000
Salaries 180,000 120,000 60,000
Net income 630,000 270,000 360,000
Bonus 24,000 24,000
Remainder 10,000 6,000 4,000
Net income 664,000 398,400 265,600
nal capital contribution ratio
tio agreement provides that
ed in the ratio of 6:1:3

l and Bea withdrawing

d net loss of P 1,000,000

d. P 2,400,000

spective capital contribution

provides that profits or loss

nthly salary for Michael

original capital contribution ratio
nd P 1,000,000, respectively.
apital on December 31, 2021

d. P 2,860,000

nized to train prospective

articles of co-partnership
nd Steph, respectively
:2 for Klay and Steph, respectively

ear 2017 are provided:

Steph, Capital
P 500,000
100,000

(200,000)

for year 2017.

d. P 1,251,500

ized to train professional

l investment of P 1M and

ely for Drumond and Jordan

20% of the net income after interest

f net income after interest, salary and

d. P 500,000
 suming the bonus is equivalent
ar ended December 31, 2018?
d. P 500,000