PRELIM GRADED EXERCISES 0007

1. In the calendar year 2020, the partnership of A and B realized a net profit of P 240,000. The capital
accounts of the partners show the following postings:

A capital B, capital
Debit Credit Debit Credit
Jan. 120,000 80,000
May1 20,000 10,000
July 1 20,000
Aug 1 10,000
Oct 1 10,000 5,000

a. If the profits are to be divided based on average capital, the share of A and B, respectively
are :
b. If 20% interest based on the capital at the end of the year is allowed and given and the balance
of the 240,000 profit is divided equally, the total share of A and B, respectively are:
c. Prepare journal entry to record the distribution of profit of each of the given case.

2. In the calendar year 2020, the partnership of Ana and Fe show the postings on their capital accounts
presented below:

Ana, capital Fe, capital

Debit Credit Debit Credit
Jan. 180,000 130,000
June 1 20,000 30,000
August 1 15,000
Oct 1 10,000
Nov 1 10,000 5,000
A. For each of the following independent profit and loss agreement cases, prepare a schedule to
distribute profit: ( 5 pts each)

1. Salaries are provided to Ana of 30,000 and 20,000 to Fe. Ana receives a bonus of 5 % of profit after
bonus. Interest of 10% based on ending capital balances and remainder will be shared on the ratio of
3:2. Profit for distribution was P 500,000.
2. Ana receives a bonus of 10% of profit after bonus and salaries. Salaries are P
40,000 to Ana and 30,000 to Fe. Interest of 10% based on average capital balances and any remainder
will be divided equally. Profit for distribution was P 680,000.
3. Both Ana and Fe are given an interest of 10% based on their respective average
capital balances, salaries of P 80,000 and 60,000 are given respectively. Ana receives a bonus of 15%
of profit after interest salaries and bonus and any remainder will be divided equally. Profit for
distribution was P 400,000.

B. Prepare journal entry to record the distribution of profit of each of the given case. ( 2 points each)