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Chapter 1 Problem 3: Exercises: - Journal Entry

1. The document presents financial information for partners Mr. Sun and Ms. Moon including asset values, capital contributions, and profit/loss sharing ratios. 2. It is determined that Ms. Moon's actual capital contribution is less than the minimum required based on the ratios, representing a deficiency of $300,000. 3. Ms. Moon will need to make an additional capital contribution of $300,000 to meet the minimum requirement.

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Alarich Catayoc
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187 views18 pages

Chapter 1 Problem 3: Exercises: - Journal Entry

1. The document presents financial information for partners Mr. Sun and Ms. Moon including asset values, capital contributions, and profit/loss sharing ratios. 2. It is determined that Ms. Moon's actual capital contribution is less than the minimum required based on the ratios, representing a deficiency of $300,000. 3. Ms. Moon will need to make an additional capital contribution of $300,000 to meet the minimum requirement.

Uploaded by

Alarich Catayoc
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as XLSX, PDF, TXT or read online on Scribd
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CHAPTER 1 PROBLEM 3: EXERCISES

1 SUNNY
CASH 180,000.00
ACCOUNTS RECEIVABLES (100K-40K) 60,000.00
INVENTORY 120,000.00
LAND
360,000.00
ACCOUNTS PAYABALE (60,000.00)
ADJUSTED BALANCE 300,000.00

•JOURNAL ENTRY

SUNNY CAPITAL 40,000.00


ALLOWANCE FOR DOUBTFUL ACCOUNTS

SUNNY CAPITAL 100,000.00


INVENTORY
ACCOUNTS PAYABLE

LAND 260,000.00
GLOOMY CAPITAL

2
SUNNY CAPITAL 300,000.00
DIVIDED BY: P/L SHARING RATIO OF SUNNY 30%
1,000,000.00
MULTIPLY BY: P/L SHARING RATIO OF GLOOMY 70%
MINIMUM CAPITAL REQUIRED OF GLOOMY 700,000.00
GLOOMY'S CAPITAL 600,000.00
DEFICIENCY IN GLOOMY'S CAPITAL CONTRIBUTION 100,000.00

GLOOMY CAPITAL 600,000.00


DIVIDED BY: P/L SHARING RATIO OF GLOOMY 70%
857,142.86
MULTIPLY BY: P/L SHARING RATIO OF SUNNY 30%
MINIMUM CAPITAL REQUIRED OF SUNNY 257,142.86
SUNNY'S CAPITAL 300,000.00
DEFICIENCY IN SUNNY'S CAPITAL CONTRIBUTION -

SUNNY'S CAPITAL 300,000.00


GLOOMY'S CAPITAL (600K+100K) 700,000.00
ADJUSTED TOTAL CONTRIBUTIONS 1,000,000.00

•JOURNAL ENTRY

CASH 100,000.00
GLOOMY CAPITAL

3
ACTUAL CONTRIBUTIONS
SUNNY 300,000.00
GLOOMY 600,000.00
TOTAL 900,000.00

• COMPOUND ENTRY
CASH 180,000.00
ACCOUNTS RECEIVABLE 60,000.00
INVENTORY 120,000.00
LAND 600,000.00
ACCOUNTS PAYABLE
SUNNY CAPITAL (300K+150K)
GLOOMY CAPITAL (600K-150K)

•SIMPLE ENTRY
CASH 180,000.00
SUNNY CAPITAL

ACCOUNTS RECEIVABLE 100,000.00


SUNNY CAPITAL

SUNNY CAPITAL 40,000.00


ALLOWANCE FOR DOUBTFUL ACCOUNTS

INVENTORY 120,000.00
SUNNY CAPITAL

SUNNY CAPITAL 60,000.00


ACCOUNTS PAYABLE

LAND 600,000.00
GLOOMY CAPITAL

GLOOMY CAPITAL 150,000.00


SUNNY CAPITAL
4
SUNNY
CASH 180,000.00
ACCOUNTS RECEIVABLES (100K-40K) 60,000.00
INVENTORY 120,000.00
LAND
ACCOUNTS PAYABLE (60,000.00)
NET CONTRIBUTIONS 300,000.00
EQUAL INTERESTS (900,000/2) 450,000.00
CASH RECEIPT (PAYMENT) (150,000.00)

• GLOOMY SHALL RECEIVED P150,000 FROM SUNNY

INTIAL CAPITAL 900,000.00

SUNNY'S REQUIRED CAPITAL BALANCE (900K*30%) 270,000.00


GLOOMY'S REQUIRED CAPITAL BALANCE (900K*70%) 630,000.00

SUNNY
ACTUAL CONTRIBUTIONS 300,000.00
REQUIRED CAPITAL BALANCES 270,000.00
ADDITIONAL (WITHDRAWALS) 30,000.00

► SUNNY SHALL MAKE AN ADDITIONAL INVESTM


WHILE GLOOMY SHALL WITHDRAW P30,000
CH

GLOOMY TOTAL 1
180,000.00
60,000.00
120,000.00
600,000.00 600,000.00
600,000.00 960,000.00
(60,000.00)
600,000.00 900,000.00

40,000.00

40,000.00
60,000.00

260,000.00 2
3

100,000.00

BONUS METHOD
(900,000*50%) 450,000.00
(900,000*50%) 450,000.00
900,000.00 4

60,000.00
450,000.00
450,000.00

180,000.00

100,000.00

40,000.00

120,000.00

60,000.00

600,000.00

150,000.00
GLOOMY TOTAL
180,000.00
60,000.00
120,000.00
600,000.00 600,000.00
(60,000.00)
600,000.00 900,000.00
450,000.00 900,000.00
150,000.00 -
5

GLOOMY TOTAL
600,000.00 900,000.00
630,000.00 900,000.00
(30,000.00) -

AN ADDITIONAL INVESTMENT OF P30,000


LL WITHDRAW P30,000
CHAPTER 1 PROBLEM 6: FOR CLASSROOM DISCUSSIONS

CASH
ACCOUNTS RECEIVABLES (250K-50K)
LAND
EQUIPMENT (180K-30K)

MORTGAGE PAYABLE
ADJUSTED BALANCE

•JOURNAL ENTRY

CASH
ACCOUNTS RECEIVABLES
LAND
EQUIPMENT
MORTGAGE PAYABLE
MR. SUN CAPITAL
MS. MOON CAPITAL

MR. SUN CAPITAL


DIVIDED BY: P/L SHARING RATIO OF MR. SUN

MULTIPLY BY: P/L SHARING RATIO OF MS. MOON


MINIMUM CAPITAL REQUIRED OF MS. MOON
MS. MOON CAPITAL
DEFICIENCY IN MS. MOON CAPITAL CONTRIBUTION

MS. MOON CAPITAL


DIVIDED BY: P/L SHARING RATIO OF MS. MOON

MULTIPLY BY: P/L SHARING RATIO OF MR. SUN


MINIMUM CAPITAL REQUIRED OF MR. SUN
MR. SUN
DEFICIENCY IN MR. SUN CAPITAL CONTRIBUTION

•ANSWER:
MS . MOON HAS A DEFICIENCY IN THE CAPITAL CONTRIBUTION, THUS THE PARTNER REQUIRED TO HAVE AN
ADDITIONAL CONTRIBUTION AMOUNTING P300,000
MR. SUN
MS. MOON
TOTAL

•JOURNAL ENTRY

MS. MOON CAPITAL


MR. SUN CAPITAL

CASH
ACCOUNTS RECEIVABLES (250K-50K)
LAND
EQUIPMENT (180K-30K)
MORTGAGE PAYABLE
NET CONTRIBUTIONS
EQUAL INTERESTS (1,500,000/2)
CASH RECEIPT (PAYMENT)

•COMPOUND JOURNAL ENTRY

CASH
ACCOUNTS RECEIVABLES (250K-50K)
LAND
EQUIPMENT (180K-30K)
MORTAGAGE PAYABLE
MR. SUN CAPITAL
MS. MOON CAPITAL

•SIMPLE JOURNAL ENTRY

CASH
MR. SUN CAPITAL

ACCOUNTS RECEIVABLE
MR. SUN CAPITAL

MR. SUN CAPITAL


ALLOWANCE FOR DOUBTFUL ACCOUNTS
LAND
MS. MOON CAPITAL

EQUIPMENT
MS. MOON CAPITAL

MS. MOON CAPITAL


ACCUMULATED DEPRECIATION

MS. MOON CAPITAL


MORTGAGE PAYABLE

INTIAL CAPITAL

MR. SUN REQUIRED CAPITAL BALANCE (1,500,000*50%)


MS. MOON REQUIRED CAPITAL BALANCE (1,500,000*50%)

ACTUAL CONTRIBUTIONS
REQUIRED CAPITAL BALANCES
ADDITIONAL (WITHDRAWALS)

►
OM DISCUSSIONS

MR. SUN MS. MOON TOTAL


400,000.00 400,000.00
200,000.00 200,000.00
1,000,000.00 1,000,000.00
150,000.00 150,000.00
600,000.00 1,150,000.00 1,750,000.00
(250,000.00) (250,000.00)
600,000.00 900,000.00 1,500,000.00

400,000.00
200,000.00
1,000,000.00
150,000.00
250,000.00
600,000.00
900,000.00

600,000.00
50%
1,200,000.00
50%
600,000.00
900,000.00
300,000.00

900,000.00
50%
1,800,000.00
50%
900,000.00
600,000.00
-

, THUS THE PARTNER REQUIRED TO HAVE AN


ACTUAL CONTRIBUTIONS BONUS METHOD
600,000.00 (1,500,000*50%) 750,000.00
900,000.00 (1,500,000*50%) 750,000.00
1,500,000.00 1,500,000.00

150,000.00
150,000.00

MR. SUN MS. MOON TOTAL


400,000.00 400,000.00
200,000.00 200,000.00
1,000,000.00 1,000,000.00
150,000.00 150,000.00
(250,000.00) (250,000.00)
600,000.00 900,000.00 1,500,000.00
750,000.00 750,000.00 1,500,000.00
(150,000.00) 150,000.00 -

400,000.00
200,000.00
1,000,000.00
150,000.00
250,000.00
750,000.00
750,000.00

400,000.00
400,000.00

250,000.00
250,000.00

50,000.00
50,000.00
1,000,000.00
1,000,000.00

180,000.00
180,000.00

30,000.00
30,000.00

250,000.00
250,000.00

1,500,000.00

750,000.00
750,000.00

MR. SUN MS. MOON TOTAL


600,000.00 900,000.00 1,500,000.00
750,000.00 750,000.00 1,500,000.00
(150,000.00) 150,000.00 -

MR. SUN SHALL WITHDRAW P150,000 FROM HIS INITIAL CONTRIBUTION WHILE MS. MOON
SHALL MAKE AN ADDITIONAL INVESTMENT OF P150,000
CHAPTER 2 PROBLEM 4: MULTIPLE CHOICE- COMPUTATIONAL

1 B.

ALLOCATION
SALARIES
ALLOCATION OF REMAINING PROFIT
(100K profit- 120K salaries)=(20k)
(20k*60%); (20K*40%)
AS ALLOCATED

2 C.

SALARIES
•BONUS AFTER SALARY BUT BEFORE DEDUCTION OF BONUS
ALLOCATION FOR REMAINING PROFIT
(560K-80K-48K)= 432,000
(432K*2/9; *3/9; 4/9)
AS ALLOCATED

•
PROFIT BEFORE SALARIES
SALARIES
PROFIT AFTER SALARIES BUT BEFORE DEDUCTION OF BONUS
MULTIPLY 10% BONUS
BONUS AFTER SALARY BUT BEFORE DEDUCTING BONUS

3 D.

BONUS
6% INTEREST ON AVERAGE CAPITAL INVESTMENTS
ALLOCATION FOR REMAINING PROFITS (80,400/3)

4 C.

SALARIES
•BONUS AFTER BONUS
ALLOCATION OF REMAINING LOSS
(-40K-100K)= -140K
(-140K*60%; 40%)
AS ALLOCATED

5 A.

SALARIES
•BONUS AFTER BONUS
ALLOCATION FOR REMAINING PROFITS (2,500,000-100,000-400,000)
(2M*3/8; 5/8)

•
PROFIT BEFORE SALARIES
SALARIES
PROFIT AFTER SALARIES BUT BEFORE DEDUCTION OF BONUS

B= 2,400,000-2,400,000/1.2%
B=2,400,000-2,000,000
B= 400,000

6
NET INCOME-BONUS-SALARY=NET INCOME AFTER
8
A B TOTAL

80,000.00 40,000.00 120,000.00

(12,000.00) (8,000.00) (20,000.00)


68,000.00 32,000.00 100,000.00

A B C TOTAL
80,000.00 80,000.00
48,000.00 48,000.00

96,000.00 144,000.00 192,000.00 432,000.00


224,000.00 144,000.00 192,000.00 560,000.00

560,000.00
(80,000.00)
480,000.00
10%
48,000.00

A B C TOTAL
10,000.00 10,000.00
4,800.00 3,000.00 1,800.00 9,600.00
26,800.00 26,800.00 26,800.00 80,400.00
41,600.00 29,800.00 28,600.00 100,000.00

A B TOTAL
100,000.00 100,000.00
- -
(84,000.00) (56,000.00) (140,000.00)
16,000.00 (56,000.00) (40,000.00)

A B TOTAL
` 100,000.00 100,000.00
400,000.00 -

750,000.00 1,250,000.00 2,000,000.00


-
1,250,000.00 1,250,000.00 2,100,000.00

2,500,000.00
(100,000.00)
2,400,000.00
A CAPITAL
1-Mar 50,000.00
1-Jun 20,000.00
1-Sep 15,000.00

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