Scribd
Upload
1 views2 pages

Chapter 2 Partnership Operations Activity

The document outlines problems related to partnership operations, focusing on the division of profits and losses among partners A, B, and C under various scenarios of profit and loss. It includes specific calculations for salary, bonuses, interest on capital contributions, and journal entries for closing income summary accounts. Additionally, it addresses the reconstruction of information to determine partnership profit based on a partner's share.

Uploaded by

May Acierto
Copyright
© All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
1 views2 pages

Chapter 2 Partnership Operations Activity

The document outlines problems related to partnership operations, focusing on the division of profits and losses among partners A, B, and C under various scenarios of profit and loss. It includes specific calculations for salary, bonuses, interest on capital contributions, and journal entries for closing income summary accounts. Additionally, it addresses the reconstruction of information to determine partnership profit based on a partner's share.

Uploaded by

May Acierto
Copyright
© All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd

Accounting for Special Transactions

Chapter 2 – Partnership Operations

Problems for Classroom Discussion

Problem 1 (Division of Profits and Losses)

A, B and C’s partnership agreement stipulates the following:

 Annual salaries of P12,000 to A and P8,000 to C.


 10% bonus to A, based on profit after salaries but before deducting the bonus.
 10% interest on the following capital contributions: A, P100,000; B, P60,000; and C,
P120,000.
 P/L ratio of 40:30:30

Case 1: Sufficient profit


The partnership earns profit of P100,000. Compute for the partners’ respective shares.

Case 2: Insufficient Profit


The partnership earns profit of P10,000. Compute for the partners’ respective shares.

Case 3: Loss
The partnership incurs loss of P20,000. Compute for the partners’ respective shares.

Problem 2 (Interest on Weighted Average Capital)

A and B’s partnership agreement stipulates the following:


 Monthly salary of P4,000 to A.
 20% bonus to A, based on profit after deductions for salary and bonus, but before
deduction for interest.
 12% interest on B’s weighted average capital balance. B initially contributed P30,000.
During the period, B contributed additional P10,000 on July 1 and P6,000 on November
30, and withdrew P4,000 on October 1.
 Balance is share equally.

Case 1: Full year


The partnership earned profit of P90,000, before salaries, bonus and interest on capital, for the
year ended December 31, 2025.

Requirement: Provide the journal entry to close the income summary account to the partners’
respective capital accounts.

Case 2: Partial year


The partnership earned profit of P90,000, before salaries, bonus and interest on capital, for the
eight months ended December 31, 2025.

Requirement: Provide the journal entry to close the income summary account to the partners’
respective capital accounts.

Problem 3 (Reconstruction of Information)


A and B’s partnership agreement stipulates the following:
 Annual salary of P20,000 to A.
 10% bonus to A, based on profit after salaries and bonus.
 Balance is shared on a 60:40 ratio.

Requirement: If B’s share in the partnership profit for the year is P32,000, how much is the
partnership profit before salary and bonus.

-END-

You might also like