Calizar, Jenny Pearl

Mantalaba, Gia Christina L.

Morancil, Trexie Marie
Ramirez, Lynel Angela
BABA1G

The capital accounts for Peridan and Rhoda at the end of the fiscal year are as follows:

Perida
January 1 Balance ₱21,000
May 1 Investment ₱9,000
October 1 Withdrawal ₱6,000

Rhoda
January 1 Balance ₱15,000
April 1 Withdrawal ₱3,000

Net income for the year ended December 31, 2001 is P30,000.

Instructions:
Give the journal entries to record the transfer of net income to the capital accounts under each of the
following assumptions: (Show the procedure used in calculating the respective amounts as an
explanation for each entry).

1 Net income is divided 60% to Perida and 40% to Rhoda.

2 Net income is divided in the ratio of capital at the beginning of the period.
3 Net income is divided in the ratio of a average capital.
4 Interest at 8% is allowed on average capital and the balance of net income is divided equally.
5 Salaries of P12,000 and P9,600 are allowed to Perida and Rhoda respectively, and the
balance of net income is divided in the ratio of capital at the end ot the period.
6 Rhoda is allowed a bonus of 33 1/3% of net income after bonus, and the balance of the net
income is divided in the ratio of average capital.

1. Net income is divided 60% to Perida and 40% to Rhoda

December 31, 2001 Income Summary ₱30,000
Perida, Capital
Rhoda, Capital
To record division of profit

Solution:
 Perida 30,000 x 60% ₱18,000
Rhoda 30,000 x 40% ₱12,000
Total ₱30,000

2. Net income is divided in the ratio of capital at the beginning of the period.
December 31, 2001 Income summary ₱30,000
Perida, Capital
Rhoda, Capital
To record the division of Profit

Solution:
Perida 30,000x21,000/36,000 ₱17,500
Rhoda 30,000x15,000/36,000 ₱12,500
Total ₱30,000

3. Net income is divided in the ratio of a average c

Perida Capital
Period # of Months
Capital Balance Peso Months
Decription Unchanged
January 1 Balance ₱21,000 4 ₱84,000
May 1 Invested 9k ₱30,000 5 ₱150,000
October 1 Draw 6k ₱24,000 3 ₱72,000
12 ₱306,000
Average Capital ₱25,500

Total Average Capital ₱38,250

Total Average Capital: P25,500+P12,750-P38,250
To compute distribution profit:
Perida: 30,000*25,500/38,250 ₱20,000
Rhoda: 30,000*12,750/38,250 ₱10,000

4. Interest at 8% is allowed on average capital and the balance of net income

To Compute:
Perida Capital Rhoda Capital
Interest on average capital
25,500 x 8% ₱2,040
12,750 x 8% ₱1,020
Remainder (30k-2,040-1,020)
 @ 50:50
P26,940 x 50% ₱13,470
P26,940 x 50% ₱13,470
TOTAL SHARE ₱15,510 ₱14,490

5. Salaries of P12,000 and P9,600 are allowed to Perida and Rhoda respectively, and the balance of net in
To Compute:
Perida Rhoda
₱12,000
Salary
₱9,600
Remaining (30k-21,600)
@ 2:1
8,400 x 2/3 ₱5,600
8,400 x 1/3 ₱2,800
TOTAL SHARES ₱17,600 ₱12,400

6. Rhoda is allowed a bonus of 33 1/3% of net income after bonus, and the balance of the net incom
To Compute:
Perida Rhoda
Salary ₱10,000
Remaining (30k-10k)
@ 2:1
20,000 x 2/3 ₱13,333
20,000 x 1/3 ₱6,667
TOTAL SHARES ₱13,333 ₱16,667
ts under each of the
mounts as an

is divided equally.
ely, and the

alance of the net

Rhoda

₱18,000
₱12,000
ng of the period.

₱17,500
₱12,500

divided in the ratio of a average capital.

Rhoda Capital
Period # of Months
Capital Balance Peso Months
Decription Unchanged
January 1 Balance ₱15,000 3 ₱45,000
April 1 Draw 3k ₱12,000 9 ₱108,000
12 ₱153,000
Average Capital ₱12,750

Debit Credit
Income Summary ₱30,000
Perida, Capital ₱20,000
Rhoda Capital ₱10,000

al and the balance of net income is divided equally.

DEBIT CREDIT
Income Summary ₱3,060
Perida, Capital ₱2,040
Rhoda, Capital ₱1,020
To record 8% interest of each partner.
 Income Summary ₱26,940
Perida, Capital ₱13,470
Rhoda, Capital ₱13,470
To record division of remaining
income balance.

ctively, and the balance of net income is divided in the ratio of capital at the end ot the period.
ENTRY
DEBIT CREDIT
Income Summary ₱30,000
Perida, Capital ₱17,600
Rhoda, Capital ₱12,400

nd the balance of the net income is divided in the ratio of average capital.
ENTRY
DEBIT CREDIT
Income Summary ₱30,000
Perida, Capital ₱13,333
Rhoda, Capital ₱16,667