1

10
Excercise 3-1
1. 1
2. 0
3. 0
4. 0
5. 1
6. 0
7. 1
8. 1
9. 0
10. 0

Exercise 3-2
1. Partner, Drawing
2. Industrial Parnter
3. Capital Ratio
4. Distribution of Net Income or Net Loss
5. Salaries
6. Bonus
7. Financial Statement Preparation
8. Profit and Loss Ratio
9. Statement of Changes in Partners' Equity
10. Income Summary Account

Exercise 3-3
1. D
2. C
3. B
4. A
5. C
6. A
7. C
8. A
 9. C
10. D
 page 10
DATE PARTICULARS P/R Debit Credit
2019
Dec. 31 Merchandise Inventory 26500
Income Summary 26500
To record merchandise inventory and balance

31 Sales P 800,000
Purchase Discount 8,000
Income Summary P 808,000
Close Nominal Accounts with normal Credit Balances

31 Income Summary P 558,500

Merchandise Inventory, January 1 P 50,000
Purchases P 300,000
Freight in 7500
Sales Discount P 12,000
Sales Returns and Allowances 4500
Rent Expense P 10,000
Salaries & Wages 90,000
Supplies Expense 9,500
Taxes and Licenses Expense 15,000
Utilities Expense 60,000
Closing Nominal Accounts with Normal Debit Accounts

31 Income Tax Expense 55,200

Income Tax Payable 55,200
20% Income Tax

Income Summary 55,200

Income Tax Expense 55,200
Close Income Tax Expense to Income Summary
Income Summary P 220,800
James, Drawing P 73,600
John, Drawing P 73,600
Jude, Drawing P 73,600
Distribution of Net Income
 JJJ Partnership
Income Statement
For the year ended December 31, 2020

Net Sales Revenue P 783,500

Less: Cost of Sales P 323,000
Gross Profit P 460,500
Operating Expenses:
Administrative Expenses P 184,500
Net Income Before Tax P 276,000
Less: 20% Income Tax 55,200
Net Income After Tax P 220,800

Distribution of Net Income

James John Jude Total
Income Divided Equally P 73,600 P 73,600 P 73,600 P 220,800

Computational Notes to Financial Statements

Note 1: Net Sales Revenue
Sales P 800,000
LESS: Sales Discount P 12,000
Sales Returns and Allowances 4500 16,500
P 783,500

Note 2: Cost of Sales

Merchandise Inventory, January 1 P 50,000
Add: Net Cost of Sales
Purchases P 300,000
Less: Purchase Discounts 8,000
Net Purchases P 292,000
 Add: Freight in 7500 299,500
Cost of Goods Available for Sale P 349,500
Merchandise Inventory, December 31 26500
P 323,000

Note 3: Administrative Expenses

Rent Expense P 10,000

Salaries and Wages 90,000
Supplies Expense 9,500
Taxes and Licenses Expense 15,000
Utilities Expense 60,000
P 184,500
 DATE PARTICULARS P/R DEBIT CREDIT D
2020
Dec. 31 Income Summary 450,000
Luz, Drawing 135,000
Olivia, Drawing 180,000
Vera, Drawing 90,000
Ethel, Drawing 45,000
Distribution of Net Income
 Distribution of Net Income
Luz Olivia Vera Ethel Total
P 135,000 P 180,000 P 90,000 P 45,000 P 450,000
 Average Capital
Maria
Capital # of mos. Peso Total Peso Average
Date Balance Unchanged Month Month Capital
January 1 200,000 2 400,000
March 1 150,000 6 900,000
August 31 250,000 1 250,000
October 1 230,000 2 460,000
December 1 380,000 1 380,000
12 2,390,000 199,166.67

Martha
January 1 400,000 1 400,000
Febuary 1 390,000 4 1,560,000
May 31 440,000 1 440,000
July 1 410,000 4 1,640,000 120000
November 1 510,000 2 1,020,000
12 5,060,000 421,666.67
7,450,000 620,833

Distribution of Net Income

Maria Martha
12% Interest
23,900 50,600 74,500 214,500
Annual Salaries 60,000 80,000 140,000
1/3 to Maria and 2/3 to Martha (31,500) (63,000) (94,500)
Net Income 52,400 67,600 120,000 -94,500

Journal Entry
Debit Credit
Dec-31
Income Summary 120,000
Maria, Drawing 52,400
Martha, Drawing 67,600
Distribution of Net Income
 Distribution of Net Income 210000
Martin Isidore Total
10% Interest
100,000 50,000 150,000 -204,000
Annual Salaries 120,000 144,000 264,000
Balance 2:1 (136,000) (68,000) (204,000) -408000
Net Income 84,000 126,000 210,000 -136000 -68,000

Journal Entry
Debit Credit
Dec-31
Income Summary 210,000
Martin, Drawing 84,000
Isidore, Drawing 126,000
Distribution of Net Income

Distribution of Net Income

Martin Isidore Total
10% Interest 100,000 50,000 150,000
Annual Salaries 120,000 144,000 264,000 -972000 -162000
Balance 2:1 (324,000) (162,000) (486,000) -324000
Net Loss -104,000 32,000 -72,000

Journal Entry
Debit Credit
Dec-31
Martin, Drawing -104,000
Isidore, Drawing 32,000
Income Summary -72,000
 Distribution of Net Loss
Margaret Elizabeth Cecilia Total
10% Interest on Original Capital
25,000 20,000 11,200 56,200 -184800 -138600
Monthly Salary 120,000 120,000 240,000 -18480 -13860
Balance 4:3:3 (18,480) (13,860) (13,860) (46,200)
Net Loss 6,520 126,140 117,340 250,000

Journal Entry
2020
Jun-30 Debit Credit
Margaret, Drawing 6,520
Elizabeth, Drawing 126,140
Cecilia, Drawing 117,340
Income Summary 250,000
 Distribution of Net Income
Lucia Jacinta Total
12% Interest on Original Capital
180,000 120,000 300,000
Month Salary 40,000 20,000 60,000 3120000 4680000
Bonus 60,000 60,000 312000 468000
Balance 4:6 312,000 468,000 780,000
Net Income 592,000 608,000 1,200,000

Partners' Capital Balances

Lucia Jacinta Total
Beginning Capital Balance 1,500,000 1,000,000 2,500,000
Share in Net Income 592,000 608,000 1,200,000
Ending Capital Balance 2,092,000 1,608,000 3,700,000
 RGem Trading
Income Statement Rgem Trading
For the year ended December 31, 2020 Statement of Changes in Partner's Equ
For the year ended December 31, 202
Net Sales Revenue P 732,000
Cost of Sales -485,000 Beginning Capital
Gross Profit P 247,000 Add: Share of Net Income
Operating Expenses Sub-Total
Selling and Distribution Expenses 103,100 Less: Drawing
General Administrative Expenses 112,700 215,800 Ending Capital
Net Income Before Tax 31,200
Less: Tax Income 6,240
Net Income After Tax P 24,960
Distribution of Net Income
Gem Romy Total
5% on Beginning Capital 4,000 3,500 7,500
Divided Equally 8,730 8,730 17,460
Net Income 12,730 12,230 24,960

Computational Notes to Financial Statements

Note 1 Net Sales Revenue
Sales P 758,000
Sales Discount P 11,000
Sales Returns & Allowances 15,000 26,000
P 732,000

Note 2 Cost of Sales

Merchandise Inventory, January 1 P 100,000
Add: Net Cost of purchases
Purchases P 520,000
 Less: Purchase Returns and Allowances 5,000
Purchase Discounts 3,000 P 512,000
Net Purchases P 612,000
Add: Freight In 18,000
Cost of goods available for sale P 630,000
Less: Merchandise Inventory, December 31 145,000
Cost of Sales P 485,000

Note 3: Trade and Other Receivables

Accounts Receivables P 143,000
Less: Allowance for Doubtful Accounts 5,000 P 138,000
Notes Receivables 36,700
Total Trade Receivables P 174,700

Note 4: Property, Plant and Equipment

Delivery Equipment P 350,000
Less: Accumulated Depreciation- Delivery
Equipment (140,000)
Total Carrying Value P 210,000

Note 5: Trade and Other Payables

Accounts Payable P 93,033
Unearned Commission Income 39,000
SSS & Philhealth Contributions Payable 2,000
P 134,033
 Rgem Trading Rgem Trading
ment of Changes in Partner's Equity Statement of Financial Position
he year ended December 31, 2020 December 31, 2020
Gem Romy Total ASSETS
P 80,000 P 70,000 P 150,000 Current Assets
12,730 12,230 24,960 Cash
P 92,730 P 82,230 P 174,960 Trade and Other Receivables
(10,000) (5,000) (15,000) Merchandise Inventory
P 82,730 P 77,230 P 159,960 Prepaid Expenses
Non-Current Assets
Property, Plant and Equipment
Financial Assets at Fair Value through Profit or Loss

Total Assets

Liabilities and Partner's Equity

Current Liabilities
Trade and Other Payables
Income Tax Payable
Total Liabilities
Non-Current Liabilities
Notes Payable due 2022
Total Liabilities

Partners' Equity
Total Liabilities and Partner's Equity
ading
ancial Position
31, 2020
TS

P 150,000
174,700
145,000
7,633 P 477,333

210,000
26,000 P 236,000

P 713,333

P 134,033
6,240 140,273

413100
P 553,373

159,960
P 713,333