PROBLEM #6: A SOLE PROPRIETOR AND AN INDIVID

TOLENTINO
ACCOUNT TITLE DEBIT CREDIT
Tolentino, Capital 32,000
Allowance for Uncollectible Accounts 32,000

Tolentino, Capital 10,000

Accumulated Depreciation 10,000

BOOKS OF TOLENTINO
Allowance for Uncollectible Accounts 48,000
Accumulated Depreciation 20,000
Accounts Payable 36,000
Tolentino, Capital 310,000
Cash 4,000
Accounts Receivable 160,000
Inventory 200,000
Equipment 50,000
To close the books of Tolentino

BOOKS OF THE PARTNERSHIP

[1]
Cash 4,000
Accounts Receivable 160,000
Inventory 200,000
Equipment 50,000
Allowance for Uncollectible Accounts 48,000
Accumulated Depreciation 20,000
Accounts Payable 36,000
Tolentino, Capital 310,000
To record the investment of Tolentino

Tolentino and Tan Marketing

Statement of Financial Position
April 8, 2019

ASSETS
Cash ₱ 190,000
Accounts Receivable ₱ 160,000
Less: Allowance for Uncollectible Accounts 48,000 112,000
Inventory 200,000
Equipment ₱ 50,000
Less: Accumulated Depreciation 20,000 30,000
Total Assets ₱ 532,000

LIABILITIES AND OWNERS' EQUITY

Accounts Payable ₱ 36,000
Tolentino, Capital 310,000
Tan, Capital 186,000
Total Liabilities and Owners' Equity ₱ 532,000
OPRIETOR AND AN INDIVIDUAL

THE PARTNERSHIP
[2]
Cash 186,000
Tan, Capital 186,000
To record the investment of Tan
 PROBLEM #7: A SOLE PROPRIETOR AND AN INDIVID
MULLES
ACCOUNT TITLE DEBIT CREDIT
Mulles, Capital 304,000
Accounts Receivable 304,000

Allowance for Uncollectible Accounts 117,000

Mulles, Capital 117,000

Mulles, Capital 112,500

Inventory 112,500

Mulles, Capital 29,250

Prepaid Rent 29,250

Accumulated Depreciation 7,500

Mulles, Capital 7,500

BOOKS OF MULLES
Accumulated Depreciation 90,000
Notes Payable 330,000
Accounts Payable 505,500
Mulles, Capital 2,393,000
Cash 229,500
Accounts Receivable 1,799,000
Inventory 900,000
Store Equipment 390,000
To close the books of Mulles

BOOKS OF THE PARTNERSHIP

[1]
Cash 229,500
Accounts Receivable 1,799,000
Inventory 900,000
Store Equipment 390,000
Accumulated Depreciation 90,000
Notes Payable 330,000
Accounts Payable 505,500
Mulles, Capital 2,393,000
To record the investment of Mulles

Mulles & Lucena Storage and Sales

Statement of Financial Position
July 1, 2019

ASSETS
Cash ₱ 2,622,000
Accounts Receivable 1,799,000
Inventory 900,000
Store Equipment ₱ 390,000
Less: Accumulated Depreciation 90,000 300,000
Land 500,000
Building 1,450,000
Total Assets ₱ 7,571,000

LIABILITIES AND OWNERS' EQUITY

Notes Payable ₱ 330,000
Accounts Payable 505,500
Mulles, Capital 2,393,000
Lucena, Capital 4,343,000
Total Liabilities and Owners' Equity ₱ 7,571,500
OPRIETOR AND AN INDIVIDUAL

THE PARTNERSHIP
[2]
Cash 2,393,000
Land 500,000
Building 1,450,000
Lucena, Capital 4,343,000
To record the investment of Lucena
 PROBLEM #8: TWO SOLE PROPRIETORS
GERON
ACCOUNT TITLE DEBIT CREDIT
Geron, Capital 20,000
Allowance for Uncollectible Accounts 20,000

Geron, Capital 5,500

Inventories 5,500

Geron, Capital 2,000

Other Assets 2,000

BOOKS OF GERON
Allowance for Uncollectible Accounts 20,000
Account Payable 178,940
Notes Payable 200,000
Geron, Capital 614,476
Cash 11,000
Accounts Receivable 234,536
Inventories 114,535
Land 603,000
Furniture and Fixtures 50,345
To close the books of Geron

BOOKS OF THE PARTNERSHIP

[1]
Cash 11,000
Accounts Receivable 234,536
Inventories 114,535
Land 603,000
Furniture and Fixtures 50,345
Account Payable 178,940
Notes Payable 200,000
Allowance for Uncollectible Accounts 20,000
Geron, Capital 614,476
To record the investment of Geron

Geron and Yumol

Statement of Financial Position
Jul-01

ASSETS

Cash ₱ 33,354
Accounts Receivable ₱ 802,426
Less: Allowance for Uncollectible Accounts 55,000 747,426
Inventories ₱ 380,137
Less: Accumulated Depreciation 12,200 367,937
Land 603,000
Building 428,267
Furniture and Fixtures 85,134
Total Assets ₱ 2,265,118

LIABILITIES AND OWNERS' EQUITY

Account Payable ₱ 422,590
Notes Payable 545,000
Geron, Capital 614,476
Yumol, Capital 683,052
Total Liabilities and Owners' Equity ₱ 2,265,118
WO SOLE PROPRIETORS
YUMOL
ACCOUNT TITLE DEBIT CREDIT
Yumol, Capital 35,000
Allowance for Uncollectible Accounts 35,000

Yumol, Capital 6,700

Inventories 6,700

Yumol, Capital 3,600

Other Assets 3,600

BOOKS OF YUMOL
Allowance for Uncollectible Accounts 35,000
Account Payable 243,650
Notes Payable 345,000
Yumol, Capital 683,052
Cash 22,354
Accounts Receivable 567,890
Inventories 253,402
Building 428,267
Furniture and Fixtures 34,789
To close the books of Yumol

THE PARTNERSHIP
[2]
Cash 22,354
Accounts Receivable 567,890
Inventories 253,402
Building 428,267
Furniture and Fixtures 34,789
Account Payable 243,650
Notes Payable 345,000
Allowance for Uncollectible Accounts 35,000
Yumol, Capital 683,052
To record the investment of Yumol
 PROBLEM #9: TWO SOLE PROPRIETORS
MEDINA
ACCOUNT TITLE DEBIT CREDIT
Medina, Capital 105,200
Merchandise Inventory, Beginning 105,200

Land 68,000
Medina, Capital 68,000

Building 64,000
Medina, Capital 64,000

Medina, Capital 8,000

Office Equipment 8,000

Medina, Capital 48,000

Repair Equipment 48,000

Notes Payable 60,000

Medina, Capital 60,000

BOOKS OF MEDINA
60,000
Accounts Payable 170,000
Mortgage Payable 200,000
Allowance for Uncollectible Accounts 22,400
Accumulated Depreciation 106,000
Medina, Capital 699,600
Cash 42,000
Accounts Receivable 389,200
Merchandise Inventory 356,400
Office Supplies 30,400
Land 108,000
Building 192,000
Office Equipment 16,000
Repair Equipment 124,000
To close the books of Medina
BOOKS OF THE PARTNERSHIP
[1]
Cash 42,000
Accounts Receivable 389,200
Merchandise Inventory 356,400
Office Supplies 30,400
Land 108,000
Building 192,000
Office Equipment 16,000
Repair Equipment 124,000
Notes Payable 60,000
Accounts Payable 170,000
Mortgage Payable 200,000
 Allowance for Uncollectible Accounts 22,400
Accumulated Depreciation 106,000
Medina, Capital 699,600
To record the investment of Medina

Medina and Loqueloque Hunting Gears

Statement of Financial Position
March 1, 2019

ASSETS
Cash ₱ 72,000
Accounts Receivable ₱ 558,400
Less: Allowance for Uncollectible Accounts 36,800 521,600
Merchandise Inventory 664,400
Prepaid Rent 6,000
Office Supplies 34,400
Land 108,000
Building ₱ 192,000
Less: Accumulated Depreciation 32,000 160,000
Office Equipment ₱ 56,000
Less: Accumulated Depreciation 19,200 36,800
Repair Equipment ₱ 124,000
Less: Accumulated Depreciation 68,000 56,000
₱ 1,659,200

LIABILITIES AND OWNERS' EQUITY

Notes Payable ₱ 60,000
Accounts Payable 281,600
Mortgage Payable 200,000
Medina, Capital 699,600
Loqueloque, Capital 418,000
₱ 1,659,200
WO SOLE PROPRIETORS
LOQUELOQUE
ACCOUNT TITLE DEBIT CREDIT
Merchandise Inventory 7,200
Loqueloque, Capital 7,200

Loqueloque, Capital 22,000

Office Equipment 22,000

BOOKS OF LOQUELOQUE
Accounts Payable 111,600
Allowance for Uncollectible Accounts 14,400
Accumulated Depreciation 13,200
Loqueloque, Capital 418,000
Cash 30,000
Accounts Receivable 169,200
Merchandise Inventory 308,000
Prepaid Rent 6,000
Office Supplies 4,000
Office Equipment 40,000
To close the books of Loqueloque

THE PARTNERSHIP
[2]
Cash 30,000
Accounts Receivable 169,200
Merchandise Inventory 308,000
Prepaid Rent 6,000
Office Supplies 4,000
Office Equipment 40,000
Accounts Payable 111,600
Allowance for Uncollectible Accounts 14,400
Accumulated Depreciation 13,200
Loqueloque, Capital 418,000
To record the investment of Loqueloque
 PROBLEM #10: TWO SOLE PROPRIETORS
BOOKS OF APALISOC
Accounts Payable 236,000
Accrued Expenses 22,000
Notes Payable 750,000
Apalisoc, Capital 926,000
Cash 37,000
Accounts Receivable 202,000
Inventory 460,000
Property and Equipment 1,235,000

BOOKS OF THE PARTNERSHIP

[1]
Cash 37,000
Accounts Receivable 202,000
Inventory 460,000
Property and Equipment 1,235,000
Accounts Payable 236,000
Accrued Expenses 22,000
Notes Payable 750,000
Apalisoc, Capital 926,000

Apalisoc and Tuddao

Statement of Financial Position
October 31, 2019

ASSETS
Cash ₱ 117,000
Accounts Receivable 265,000
Inventory 811,000
Property and Equipment 1,809,000
Total Assets ₱ 3,002,000

LIABILITIES AND OWNERS' EQUITY

Accounts Payable ₱ 327,000
Accrued Expenses 36,000
Notes Payable 750,000
Apalisoc, Capital 926,000
Tuddao, Capital 963,000
₱ 3,002,000
WO SOLE PROPRIETORS
BOOKS OF TUDDAO
Accounts Payable 91,000
Accrued Expenses 14,000
Tuddao, Capital 963,000
Cash 80,000
Accounts Receivable 63,000
Inventory 351,000
Property and Equipment 574,000

THE PARTNERSHIP
[2]
Cash 80,000
Accounts Receivable 63,000
Inventory 351,000
Property and Equipment 574,000
Accounts Payable 91,000
Accrued Expenses 14,000
Tuddao, Capital 963,000
 PROBLEM #19: BASED ON PARTNERS' AGREEMENT
AVERAGE CAPITAL

ALVARO, CAPITAL
DATE CAPITAL ACCOUNT PORTION AVERAGE CAPITAL
1-Jan 500,000 12 6,000,000
1-Apr 50,000 9 450,000
1-Aug -150,000 5 -750,000
475,000

Profit before bonus 642,600 105%

Profit after bonus 612,000 100%
Bonus 30,600 5%

Profit before bonus and salaries 1,087,000

Less: Salaries -520,000
Profit after salaries but before bonus 567,000 108%
Profit after salaries but after bonus 525,000 100%
Bonus 42,000 8%

Profit before bonus 769,500 112.5%

Profit after bonus 684,000 100%
Bonus 85,500 12.5%
ASED ON PARTNERS' AGREEMENT
VERAGE CAPITAL

YACAPIN, CAPITAL
DATE CAPITAL ACCOUNT PORTION AVERAGE CAPITAL
1-Jan 700,000 12 8,400,000
1-Jul -100,000 6 -600,000
1-Sep 225,000 4 900,000
725,000

1 ALVARO YACAPIN TOTAL

10% Interest ₱ 47,500 ₱ 72,500 ₱ 120,000
Salary Allowances 240,000 280,000 520,000
Bonus 30,600 30,600
Balance 3:2 -16,800 -11,200 -28,000
Share of Partners ₱ 301,300 ₱ 341,300 ₱ 642,600

2 ALVARO YACAPIN TOTAL

10% Interest ₱ 16,000 ₱ 54,500 ₱ 70,500
Salary Allowances 240,000 280,000 520,000
Bonus 42,000 42,000
Balance equally 227,250 227,250 454,500
Share of Partners ₱ 525,250 ₱ 561,750 ₱ 1,087,000

3 ALVARO YACAPIN TOTAL

10% Interest ₱ 50,000 ₱ 70,000 ₱ 120,000
Salary Allowances 240,000 280,000 520,000
Bonus 85,500 85,500
Balance 4:2 29,333.33 14666.67 44,000
Share of Partners ₱ 404,833.33 ₱ 364,666.67 ₱ 769,500
 PROBLEM #20: PREPARATION OF FINANCIAL STATEMENTS

Super Manila Novelty Store

Statement of Comprehensive Income
For the Year Ended December 31, 2019

Sales ₱ 2,500,000
Less: Cost of Sales 1,450,000
Gross Profit ₱ 1,050,000
Less: Salaries Expense ₱ 450,000
Rent Expense 200,000
Insurance Expense 30,000
Utilities Expense 20,000 700,000
Net Profit ₱ 350,000

Division of Profit
CASTOR ARENAS LAURENTE
Profit Ratio 30:20:50
30% ₱ 105,000
20% ₱ 70,000
50% ₱ 175,000
Share of Partners in Profits ₱ 105,000 ₱ 70,000 ₱ 175,000

Super Manila Novelty Store

Statement of Changes in Equity
For the Year Ended December 31, 2019

Castor Arenas Laurente

Original Investment ₱ 75,000 ₱ 300,000 ₱ 150,000
Add: Additional Investments 50,000 25,000
Total ₱ 125,000 ₱ 325,000 ₱ 150,000
Less: Permanent Withdrawals 50,000 40,000
Balances ₱ 125,000 ₱ 275,000 ₱ 110,000
Add: Profit 105,000 70,000 175,000
Partners' Equity, Dec 31, 2019 ₱ 230,000 ₱ 345,000 ₱ 285,000

Super Manila Novelty Store

Statement of Financial Position
December 31, 2019

ASSETS
Cash ₱ 110,000
Accounts Receivable 80,000
Merchandise Inventory 800,000
Prepaid Rent 20,000
Prepaid Insurance 15,000
Total Assets ₱ 1,025,000
 LIABILITIES AND PARTNERS' EQUITY
Accounts Payable ₱ 50,000
Notes Payable 115,000
Castor, Capital 230,000
Arenas, Capital 345,000
Laurente, Capital 285,000
Total Liabilities and Partners' Equity ₱ 1,025,000
S

TOTAL

₱ 105,000
₱ 70,000
₱ 175,000
₱ 350,000

Total
₱ 525,000
75,000
₱ 600,000
90,000
₱ 510,000
350,000
₱ 860,000
 PROBLEM #21: PREPARATION OF FINAN

Calamba and Santiago

Statement of Comprehensive Income
For the Year Ended December 31, 2019

Sales ₱ 7,155,000
Less: Sales Returns and Allowances 375,750
Net Sales ₱ 6,779,250
Less: Cost of Sales 5,449,560
Gross Profit ₱ 1,329,690
Less: General Expense 149,390
Interest Expense 35,000
Selling Expense 385,880 570,270
Net Profit ₱ 759,420

Division of Profit
CALAMBA SANTIAGO
Salary Allowances ₱ 330,000 ₱ 290,000
10% Interest 61,200 49,960
Balance 50:50 14,130 14,130
Share of Partners in Profits ₱ 405,330 ₱ 354,090

Calamba and Santiago

Statement of Changes in Equity
For the Year Ended December 31, 2019

Calamba Santiago
Original Investment ₱ 612,000 ₱ 499,600
Less: Permanent Withdrawals 326,400 244,800
Balances ₱ 285,600 ₱ 254,800
Add: Profit 405,330 354,090
Partners' Equity, Dec 31, 2019 ₱ 690,930 ₱ 608,890
PROBLEM #21: PREPARATION OF FINANCIAL STATEMENTS

COST OF GOODS SOLD

Inventory, beginning
Purchases
Less: Purchase Discounts 43,050
Purchase Returns and Allowances 259,600
Net Purchases
Transportation In
Less: Inventory, ending
Cost of Goods Sold

Calamba and Santiago

Statement of Financial Position
December 31, 2019

TOTAL ASSETS
₱ 620,000 Cash
111,160 Accounts Receivable ₱ 545,070
28,260 Less: Allowance for Uncollectible Accou 18,790
₱ 759,420 Merchandise Inventory, December 31
Prepaid Insurance
Equipment ₱ 753,150
Less: Accumulated Depreciation 462,870
Total Assets

LIABILITIES AND PARTNERS' EQUITY

Accounts Payable
Total Notes Payable
₱ 1,111,600 Calamba, Capital
326,400 Santiago, Capital
₱ 540,400 Total Liabilities and Partners' Equity
759,420
₱ 1,299,820
OLD
1,440,590
5,407,160

302,650
5,104,510
224,880
1,320,420
5,449,560

ago
Position
9

₱ 132,310

526,280
1,320,420
7,350

290,280
₱ 2,276,640

S' EQUITY
₱ 677,820
299,000
690,930
608,890
₱ 2,276,640
 PROBLEM #22: BASED ON PARTNERS' A
AVERAGE CAPITAL

Pangilinan, Capital Gumban, Capital

Jan 1 600,000 Jan 1 900,000
Sept 1 300,000

Pangilinan, Drawings
Jan-Dec 80,000

PANGILINAN, CAPITAL
DATE CAPITAL ACCOUNT PORTION AVERAGE CAPITAL
1-Jan 600,000 12 7,200,000
Err:522

DE GUZMAN, CAPITAL
DATE CAPITAL ACCOUNT PORTION AVERAGE CAPITAL
1-Jan 1,100,000 12 13,200,000
1-Oct 200,000 3 600,000
1-Jul -100,000 6 -600,000
1,100,000

SCHEDULE OF LOSS DISTRIBUTION

1 PANGILINAN GUMBAN DE GUZMAN
Salary Allowances ₱ 100,000
10% Interest 60,000 100,000 110,000
Balance 30:30:40 -147,000 -147,000 -196,000
Share of Partners in Loss ₱ 13,000 -₱ 47,000 -₱ 86,000

Pangilinan, Gumban, De Guzman

Statement of Changes in Equity
For the Year Ended December 31, 2019

Pangilinan Gumban De Guzman

Original Investment ₱ 600,000 ₱ 900,000 ₱ 1,100,000
Add: Additional Investments 300,000 200,000
Total ₱ 600,000 ₱ 1,200,000 ₱ 1,300,000
Less: Permanent Withdrawals 80,000
Balances ₱ 520,000 ₱ 1,200,000 ₱ 1,300,000
Less: Pofit/Loss 13,000 -47,000 -86,000
Total ₱ 533,000 ₱ 1,153,000 ₱ 1,214,000
Less: Temporary Withdrawals -100,000
Partners' Equity, Dec 31, 2019 ₱ 533,000 ₱ 1,153,000 ₱ 1,114,000

CORRECTING ENTRY
De Guzman, Capital 12,000
Pangilinan, Capital 11,000
Gumban, Capital 1,000
EM #22: BASED ON PARTNERS' AGREEMENT
AVERAGE CAPITAL

De Guzman, Capital
Jan 1 1,100,000
Oct 1 200,000

De Guzman, Drawings
July 1 100,000

GUMBAN, CAPITAL
DATE CAPITAL ACCOUNT PORTION
1-Jan 900,000 12
1-Sep 300,000 4

TOTAL
₱ 100,000
270,000
-490,000
-₱ 120,000

Total
₱ 2,600,000
500,000
₱ 3,100,000
80,000
₱ 3,020,000
-120,000
₱ 2,900,000
-100,000
₱ 2,800,000
AVERAGE CAPITAL
10,800,000
1,200,000
1,000,000
 PROBLEM #23: PREPARATION OF FINANCIAL STATEMENTS

SCHEDULE OF PROFIT DISTRIBUTION

1 GASCON PAHILAGAO NOLASCO
Salary Allowances ₱ 200,000 ₱ 200,000 ₱ 150,000
Bonus 110,000 110,000 55,000
Balance 30:30:40 96,250 96,250 135,000
Share of Partners in Profit ₱ 406,250 ₱ 406,250 ₱ 82,500

ADJUSTING ENTRIES
 TOTAL
₱ 550,000
275,000
327,500
₱ 1,152,500
 PROBLEM #18: CASH PRIORITY PROGRAM

Bernardino, Lee and Ong

Cash Priority Program

Bernardino Lee Ong Bernardino

Capital Balances ₱ 150,000 ₱ 350,000 ₱ 200,000
Add: Loan Balances 100,000 100,000 150,000
Partners' Total Interest ₱ 250,000 ₱ 450,000 ₱ 350,000
Divided by: Profit/Loss Ratio 40% 40% 20%
Loss: Absorption Balances 625,000 1,125,000 1,750,000
Priority I: To Ong -625,000
625,000 1,125,000 1,125,000
Priority II: To Ong and Lee -500,000 -500,000
625,000 625,000 625,000

Priority III: Amounts in excess of P425,000 based on P/L Ratio 40%

Bernardino Lee Ong Total

Priority I 125,000 125,000
Priority II 83,333.33 41,666.67 125,000
Total 83,333.33 166,666.67 250,000

Distribution of Cash to Partners

Ong, Capital 166,666.67

Lee, Capital 83,333.33
Cash 250,000
Lee Ong

125,000

200,000 100,000
200,000 225,000

40% 20%
 PROBLEM #19: CASH PRIORITY PROGRAM

Santiago, Gorospe, Esparaguera and Ronzales

Cash Priority Program
September 25, 2019

Santiago Gorospe Esparaguera

Capital Balances ₱ 50,000 ₱ 25,000 ₱ 70,000
Add: Loan Balances 20,000 -10,000
Partners' Total Interest ₱ 70,000 ₱ 25,000 ₱ 60,000
Divided by: Profit/Loss Ratio 20% 25% 30%
Loss: Absorption Balances 350,000 100,000 200,000
Priority I: To Santiago -150,000
200,000 100,000 200,000
Priority II: To Santiago, Esparaguera and
Ronzales -100,000 -100,000
100,000 100,000 100,000

Priority III: Amounts in excess of

P105,000 based on P/L Ratio
 Ronzales Santiago Gorospe Esparaguera Ronzales
₱ 50,000

₱ 50,000
25%
200,000
30,000.00
200,000

-100,000 20,000 30,000 25,000

100,000 50,000 30,000 25,000

20% 25% 30% 25%

 PROBLEM #20: CASH PRIORITY PROGRAM

Espeleta and De Guia

Cash Priority Program
September 23, 2019

Espeleta De Guia Espeleta

Capital Balances ₱ 60,000 ₱ 20,000
Add: Loan Balances 10,000
Partners' Total Interest ₱ 60,000 ₱ 30,000
Divided by: Profit/Loss Ratio 40% 60%
Loss: Absorption Balances 150,000 50,000
Priority I: To Espeleta -100,000 40,000
50,000 50,000 40,000

Priority III: Amounts in excess of

P40,000 based on P/L Ratio 40%

September 23, 2019

Cash 60,000
Accounts Payable-Trade 15,000
Espeleta, Capital
De Guia, Capital
Other Assets 70,000

cash non cash liabilities

Capital Balances before liquidation 5,000 100,000 15,000
Sept-sale on non cash assets 60,000 -70,000
Balances 65,000 30,000 15,000
Payment of liabilities -15,000 -15,000
Balances 50,000 30,000 0
-49,000

Sep-23
Cash 60,000
Espeleta, Capital 4,000
De Guia, Capital 6,000
Realization of non cash assets 70,000
 De Guia

60%

loan payable, De Guia espeleta, capital de guia, capital

10,000 60,000 20,000
-4,000 -6,000
10,000 56,000 14,000

10,000 56,000 14,000