20

Chapt
er2

CHAPTER2

MULTI
PLECHOI
CEANSWERSANDSOLUTI
ONS
2-
1:d
JordanPippen Tot
al
Annualsal
ary P120,000P80,000P200,
000
Bal
ance,equal
ly ( 
 10,
000)( 
10,
000)( 
 20,
000)
Total P110,000P70,000P180,000

2-
2:a
JJKK LLTot
al
Bonus( .
20XP90, 000) P18,
000– –P 
18,000
I
nterest
JJ( .
15XP100, 000) P15,000– –)
KK( .
15XP200, 000) P 30,000 –)
LL( .
15XP300, 000) P45,000)90,000
Balance,equal
ly ( 
 6,
000)( 
  
6,000)( 
 6,
000)( 
 18,
000)
Totalprofi
tshar
e P27,000P 24,000P39,000P 90,
000
2-
3:a

2-
4:a
Al
l
anMi
chael Tot
al
I
nterest
All
an-.10X( P40,
000+60,
000/2) P  
5,000 )
Michael-.
10X( P60,
000+70,
000/
2) P  
6,500)P 11,500
Bal
ance,equall
y _14,000_14,000__28,000
Total P 19,000P20,500P 28,
000

2-
5:a
FredGreg Henr y
Tot al
I
nterest(
.10ofaver
agecapi
tal
) P12, 000P  6,
000P  4,
000P  22,000
Sal
aries 30,000 20,00050, 000
Bal
ance,equal
ly (
 35,000)( 
 35,000)(
 35,000)(105,000)
Total P 7,000( 
P29, 000)
(P11,000) (
P  33,
000)

2-
6:b
Av
erageCapi
tal
Capital Months Peso
Date Balance Unchanged Mont
hs
Januar
y1 140,000 6 P 
  
840,
000
Jul
y1 180,000 1 180,
000
August1 165,000 ¬¬¬5 __
825,
000
12 P1,
845,
000

Av
eragecapi
tal
-P1,
845,
000/
12 = P153,
750
 I
nter
est (
P153,
750X10%) = P 
15,
375
Par
tner
shi
pOper
ati
ons 21

2-
7:c
Capital Months Peso
Date Balance Unchanged Months
January1 P16,000 3 P 48,
000
Apri
l 1 17,600 2 35,
200
June1 19,200 3 57,
600
September1 15,200 4 __60,
800
12 P201,
600

Av
erageCapi
tal
(P201,
600/
12)= P16,
800

2-
8:a
Netprofi
tbeforebonus P 
 24,
000
Netprofi
tafterbonus(P24,
000/120%) __20,
000
BonustoRJ 4,
000
Bal
ance( P24,000-
P4,000)
X3/5 __12,
000
Totalpr
ofitshare P 
 16,
000

2-
9:a
LTAM Tot al
I
nterest P3,200 P  
 3,600 P  
6,800
Sal
aries 15,000 7,500 22,500
Bal
ance,3:
2 (
11,580) (
  
 7,720) (
  
19,300)
Total P 6,620 P  3,380 P 10,000

2-
10:
b
Netin
comea ft
ersal
a r
y,i
nter
estandbon
us P467,
500
Addback: Salary(P10,000X12)P120, 000
Int
erest(P250,000X. 05) __12,
500 _
132,
500
Netincomeaf terbonus( 80%) P600,
000
Netincomebef orebonus( P600,
000/80%) _750,
000
Paul'
sbonus P150,
000

2-
11:
b
CC DD EE Tot
al
Sal
ary P 
14,
000P 14,
000
Bal
ance P14,
000P 
8,400 5,600
28,
000
Addit
ional
prof
itt
oDD ( 
 1,
500)__
2,100( 
  
  
600) ____
_ _
–
Total P12,500P10,500P 
19,000P 
42,000

Netincome
FeesEarned P90,
000
Expenses _48,
000
NetIncome P42,
000
22
Chapt
er2

2-
12:
c
LL MM NN Tot
al
Interest P 
2,000P 
1,250 P 
  
750
P 
 4,
000
Annual Salar
y 8,
500– –8,500
Addi ti
onalpr
ofi
ttogi
veLL,
P20,000 9,
5005,
700 3,80019,000*
Addi ti
onalpr
ofi
ttogi
veMM, P14,
000 ___
__–__
7,050_____– _ _
7,050
Tot al P20,
000P14,000P 
4,550P 38,550
*(P9,500/50%)=P19,
000

2-
13:
a
RR SS TT Tot
al
Excess(Def i
ciency
)
RR( P80,000-P95,000) P15,
000– –)
SS( P50,
000-P40, 000) –(
P10,000)–)P  
5,000
Balance4:3:1 _47,
500_
35,625_11,
875_ _
95,000
Total P62,
500P25,625P11,875P100,000

NetI
ncome (
200,
000-100,
000)= P100,
000

2-
14:
b AA BB CC Tot
al
AA- 100, 000X10% P 
10,000)
150,000X20% 30,000) P 
40,
000
Remainder,210,
000
BB(60,000X. 05) P 3,
000 )
CC(60,000X. 05) P 3,
0006,000
Bal
ance,equally __68,
000_68,
000_68,000_ 204,
000
Total P108,
000P71,000P71,000P250,000
2-
15:
a
AJ BJ CJ Tot
al
Bonust oCJ
Netpr of
itbefor
ebonus P44,000
Netpr of
itaft
erbonus(
P44,
000/
110%)P40,000 –– P4,
000P4,000
I
nteresttoBJ – P1, 000– 1,000
Sal
aries P 10,000 –12,00022,000
Bal
ance, 4:
4:2 __6,
800_6,800__
3,400 _ 17,000
Total P 16,
800P7,800P19,400 P44,000

2-
16:
c
TotalprofitshareofPedro P200,000
Less:Salar ytoPedro P 
50,000
Interest __
20,000__70,
000
Shareint hebalance(40%) P130,000
 Netprofi
taftersalar
yandint
erest(
130,
000/
40%)P325,000
Add:Tot alSalar
ies P150,000
TotalI
nterest __
70,000_220,
000
TotalPar
tnershipIncome P545,000
Par
tner
shi
pOper
ati
ons 23

2-
17:
c
Netincomebefor
eextr
aordi
narygainandbonus(
69,
600- 12,
000)
P 
57,
600
Netincomeaft
erbonus(57,
600/120%) _48,000
BonustoRR P  9,600

Di
str
ibut
ionofNetI
ncome:
JJ RR Tot
al
Bonus –P  
9,600P  9,600
Bal
ance,equall
y P 
24,
00024,00048,000
Netprofi
tbefor
eextr
aor
dinar
ygai
n P 
24,
000P 33,600P 57,600
Ext
raordi
narygain _
_4,
800__7,200_12,000
Total P 
28,
800P 40,800P 69,600
2-
18:
a
MelJay Tot al
I
nterest P 20,000P 12,000P 32,
000
Annual Sal
ary 36,
000– 36,
000
Remai nder60:
40 __60,
000_40,000_100,000
Total P116,
000P 52,000P168, 000

2-
19:
a
DV JE FR Tot
al
Int
erestonexcess(
Def
ici
ency
) P 15,000P  3,
750(P  
 7,
500)P 11,
250
Remai nder5:
3:2 ( 
 36,875)( 
 22,125)(
  
 14,
750)( 
 73,
750)
Total (
P 21,875)(P 18,375)
(P  
22,
250)
(
P 62,
500)

2-
20:
c
Corr
ectionof1998pr of
it:
Netincomeperbooks P 19,500
Understatementofdepreci
ati
on ( 
  
2,100)
Overstatementofinv
entory
,December31 ( 
 11,400)
Adjustednetincome P  6,000

Pet
e Ri
co Tot
al
Dist
ri
buti
onofneti
ncomeperbook:
Equall
y P 
 9,
750P 
 9,
750P 
19,
500
Dist
ri
buti
onofadj
ustedneti
ncome
Equall
y ( 
  
3,000)
( 
  
3,000)
( 
  
6,000)
Requir
edDecr
ease P  
6,750P 
 6,
750P 13,
500

2-
21:
a
 TigerWoods Total
Sal
aries P 64,000P100,000P164,000
I
nterest 24,00030,000 54,
000
Bonus( P360,
000-
P54,
000)
X.25 76,500 –76, 500
Remai nder
,30:
70 __19,650__45,
850_ _65,
500
Total P184, 150P175,850P360,000
24
Chapt
er2

2-
22:
a
Holl
yFiel
d Tot al
Sal
aries P 20,000 –P  20,000
Commi ssi
on – P  25,00025,000
I
nterest 32,00033,600 65,
600
Bonus, schedul
e1 30,
000– 30,
000
Remai nder,60:
40 __35,
640_23,760__59,
400
Total P117,
640P 82,360P200,000

Schedule1
Netincomebef oresalar
y,commission,
int
erestandbonus P200,000
Less:salar
ies __20,
000
Netincomebef orebonus P180,000
Netincomeaf terbonus(P180,
000/120%) _150,
000
Bonus P 30,
000
2-
23:
a
Mike TysonTot al
Capi
talbal
ance,begi
nning P600,000P400, 000P1,000,
000
Addi
ti
onalinv
estment 100,000200,000300, 000
Capi
talwit
hdrawal -200,
000( 100,000)_-
300,000
Capi
talbal
ancebeforeprof
itandl
ossdi
str
ibut
ionP500,000P500, 000P1,000,
000

Netincome:
Salary P200,000P300,000P  
500,000
Balance,3:
2 __60,
000__40,000__100,
000
Total P260,000P340,000P  
600,000
Total P760,000P840,000P1,600,
000
Drawings ( 
200,
000)( 300,000)
( 
  
500,000)
Capit
albalance,
end P560,
000P540,
000
P1,100,000

Av
erageCapi
tal-Ki
ng:
Capital Mont hs Peso
Dat
e Balance Unchanged Months
Januar
y1 P40,000 3 P120,
000
Apri
l1 55,000 9 _495,
000
12 P615,
000
 Av
eragecapi
tal
–P615,
000/
12=P51,
250

Av
erageCapi
tal-Queen:
Capital Mont hs Peso
Dat
e Balance Unchanged Months
Januar
y1 P100,0007
P700,
000
Apri
l1 130,000 5 __
650,
000
12 P1,
350,
000
Av
eragecapi
tal
-P1,
350,
000/12=P112,
500
Par
tner
shi
pOper
ati
ons 25

2-
24:
d
Di
str
ibut
ionofNetI
ncome-Schedul
e1

KingQueen Tot al
I
nterest P 5,125P11, 250 P16,
375
Bonus, Schedul
e2 12,725– 12,725
Sal
ar i
es 25,00030, 000 55,
000
Residual,50:
50 ( 
 2,
050)_(
2,050) _(4,
100)
Total P40,800P39, 200P80, 000

Schedul
e2

Netincomebef or
eall
ocati
on P80,
000
Less:Int
erest _16,
375
Netincomebef or
ebonus P63,
625
Netincomeaf t
erbonus(P63,
625/
125%) _50,
900
Bonus P12,
725

Capi
tal
Bal
anceDecember31:
Ki
ngQueen Total
Capit
al bal
ance, January1 P40,
000P100,000P140,
000
Additi
onalinvestment _15,
000__
30,000__45,
000
Capit
al bal
ancebef or
eprof
itand
lossdist
r i
bution P55, 000P130,000P185,000
Netincome( Schedul e2) 40,80039,00080,
000
Drawings(P400X52) (
 20,800)( 
 20,
800)( 
 41,
600)
Capit
albalance, December31 P75, 000P148,400P223,400

2-
25:
d
Totalrecei
pts(
P1,
500,
000+P1,
625,
000) P3,125,
000
Expenses ( 
1,080,
000)
Netincome P2,045,
000

Di
str
ibut
iont
oPart
ner
s
Red–P1, 500,
000/
P3,
125,
000XP2,
045,
000=P   
981,
600(1)
Blue–P1,625,
000/
P3,
125,
000XP2,
045,
000= _1,
063,
400
P2,
045,
000
 Capi
talbalanceofBlueDec.31
Capit
al Bal
ance,Jan.1 P 
 374,
000
Addit
ionalinv
estment ¬_
_ _
22,
000
Capit
al bal
ancebef or
eprof
itand
lossdist
ri
bution P  
396,000
Prof
itshare 1,
063,400
Drawings ( 
  
750,000)
Capit
albalance,Dec.31 P  
709,400(
2)

26
Chapt
er2

2-
26:
a
Ray SamTot al
Capi
talbal
ances,
March1 P150,
000P180,
000P330,000
Addi
ti
onalinv
estment
,Nov.1 ¬__
____
___60,
000__60,
000
Capi
tal
bal
ancesbef
oresal
ari
es,
prof
itandDr
awi
ngs 150,
000240,
000
390,
000
Pr
ofi
tshare:
Int
erest 15,
00020,
000 35,
000
Balance,
60:
40 51,
00034,
000 85,
000
Tot
al 66,
00054,
000 120,
000
Tot
al 216,
000294,
000510,
000
Sal
ari
es _18,
000_24,
000 _
42,
000
Total 234,
000318,
000552,000
Drawi
ngs (18,
000)
(24,
000)
(42,
000)
Capi
talbal
ances,
Feb.28 P216,
000P294,
000P510,
000

2-
27:
a
SusanTannyTotal
Capi
talbal
ances,1/1 P150,000P30,
000P180,000
Addi
ti
onalinv
estment,4/
1 8,
000 8,
000
Capi
talwit
hdrawals,
7/1 ___
____(6,
000) _ (
6,000)
Balancesbeforeprof
itdist
ri
but
ion 158,
00024,
000 182,
000
Profi
tdist
ribut
ion:
Inter
est 23,4004,05027,
450
Bonus( 20%xP30, 000) 6,000 6,000
Balance,equal
ly (1,725)
(1,725) (3,450)
Tot
al 21,
675_
8,325 30,
000
Total 179,
67532,325 212,000
Drawi
ngs (12,
000)
(12,000)
(24,
000)
Capi
talbal
ances,
12/
31 P167,
675P20,
325P188,
000
Par
tner
shi
pOper
ati
ons 27

2-
28:
a
 
Sin 
 Tan 
  Uy   
Tot
al 
Capit
al balances,beg.1styear P110,
000P80,000P110,
000P300,
000
Lossdist r
ibuti
on,1styear:
Salari
es 20,00010,00030,000
I
nterest 11,0008,000 11,00030,
000
Balance,5:3:
2 (
40,000)(16,000)
(24,000) (80,000)
Total (
 9,000)( 8,
000)( 3,000) (20,000)
Total 101,00072,000107,000 280,000
Drawings (
10,000)(10,000)
(10,000) (30,000)
Capit
al balances,beg.2ndyear 91,00062,00097,000250,
000
Profi
tdistribut
ion,2ndyear:
Salari
es 20,00010,00030, 000
I
nterest 9,1006,200 9, 70025,000
Balance,5:3:
2 ( 
7,500)( 
4,500) (
 3,000) ( 15,000)
Total 21,600¬_1,70016, 700 40,000
Total 112,60063,700113, 700 290,000
Drawings _(
10,000)(10,000)_(10,000)_(
30,000)
Capit
albal ances,endof2ndy ear P102,600P53, 700P103, 700P260,000

2-
29:
c
Jay  
Kay  
  Loi  
 Tot
al 
 
Capi
talbal ances, 1/1/06 P30,000P30,000P30,000 P90, 000
Addi
tional inv
est ment ,2006 5,000 5, 000
Capi
talwi thdrawal ,2006 _(
5,000)_(4,
000)__
_ _
__ _(9,
000)
Capi
talbal ances 25,00026,00035,
00086,000
Prof
itdistri
bution, 2006:
Interest 3,0003,000 3, 0009,
000
Sal ary 7,0007,000
Bal ance, equally _
1,000_1,000_1,000__3,000
Capi
talbal ances, 1/1/07 36,00030,00039,000105,000
Addi
tional inv
est ment ,2007 5,0005,000
Capi
talwi thdrawal ,2002 ¬¬____
___(3,000)
_(8,
000) ( 11,
000)
Capi
talbal ances 41,00027,00031,00099,000
Prof
itdistri
bution, 2007:
Interest 3,6003,000 3,90010,500
Sal ary 7,0007,000
Bal ance, equally _
1,500_1,500_
1,500__4,500
 Capitalbalances, 1/1/08 53,10031,
50036,400121,
000
Additi
onal inv
est ment ,2008 6,
000 6, 000
Capitalwithdrawal ,2008 _
__ _
___(
4,000)
_(2,
000) _ (
6,000)
Capitalbalances 53,10027,
50040,400121,
000
Profi
tdistri
bution, 2008:
Int
erest 5,3103,150 3, 64012,
100
Salary 7,0007,000
Balance, equally __3,300__3,300_ _
3,300 _ __ 9,900
Capitalbalances, 12/31/ 08perbooks P68,710P33, 950P47,340 P150, 000
Under st
atementofdepr eciati
on (
2,000)(2,000)(2,
000) (6,000)
Adjustedcapi t
albal ances, 12/31/
08 P66,710P31, 950P45,340 P144, 000

28
Chapt
er2

2-
30:
a

Ken 
 Len 
 Mon 
 Tot
al 
 
Capi
talbal
ances,1/1/
07 P100,000P100,
000P100,
000P300,
000
Addi
ti
onalinv
estment,2007 40,
000 40,
000
Capi
talwit
hdrawal,
2007 ( 
20,000)___
___
____
____(  
20,
000)
Balances 80,
000140,
000100,
000320,
000
Profi
tdist
ribut
ion,2007(Schedul
e1)
Salary 60,
00060,
000
Balance,beg.Capit
alrat
io 20,
00020,
00020,
000 60,
000
Capi
tal
bal
ances,1/1/
08 100,000160,
000180,
000440,000
Capi
tal
wit
hdrawal,
2008 (
 20,
000)( 
40,
000)_
____
__(
 60,
000)
Balances 80,
000120,
000180,
000380,
000
Profi
tdist
ribut
ion,2008:
Salary 60,00060,
000
Balance,beg.capit
alr
ati
o _
_13,
636__21,818_
_24,
546_
_60,
000
Capi
talbal
ances,
12/
31/
08 P 
93,
636P141,
818P264,
546P500,
000

Schedul
e1–Comput at
ionofnetpr
ofi
t:
Tot
alcapi
tal
,2008(P647,
500–P147,500)P500,
000
Tot
alcapi
tal
,2007(P300,
000+P40,000–P80,000) _
260,
000
Tot
alpr
ofi
tfor2y
ear
s P240,
000

Netpr
ofi
tpery
ear(
P240,
000/2)P120,
000

2-
31:
d
Nar
_ do_ ¬¬¬¬¬¬¬¬_
_Or
ly
__Pedro__Tot
al_
Capi
talbal
ance,
1/1/08 P280,
000 P300,
000 P170,
000
P750,000
Addi
ti
onalinv
estment 96,
000 60,
000 -
156,000
 Wit
hdrawal s (90,
000) (72,
000)
(162,000)
Cap.bal.befor
eP/ Ldist. 376,
000 270,
000 98,
000
744,000
NP:Salary(16,
500x12) - 198,
000 -
198,000
InterestonEC( 15%) 42, 000 45,
000 25,
500
112,500
Balance25: 30:
45 (19,875) (23,
850) (35,
775) (
79,
500)
Tot al 22,
125 219,
150 (10,
275)
231,000
Capi
talbalance12/31/ 08 P398,125 P489,
150 P87,
72
P975, 000

2-
32:
d
Sam capit
al,beginning P120,
000
Addit
ionalinvest
ment( Land) 60,
000
Drawings (80,000)
Capit
albalancebef orenetpr
ofi
t(l
oss) 100,
000
Capit
albalance,end 150,
000
Prof
itshare(40%) 50,
000
Netprofi
t(P50,000÷40%) P125,
000
Par
tner
shi
pOper
ati
ons 29

2-
33:
a
__Joe_ _ _
_Tom_ _ __Tot
al_
_
Capitalbalance,1/2/07 P 80,000 P 40,
000 P120,
000
Netloss-2007:
Annual salary 96,000 48,
000 144,
000
10%i nterestonbeg.capit
al 8,000 4,
000 12,
000
Bal.beg.cap.r at
io:8:
4 (108,
000) (54, 000)
(162,
000)
Total ( 4, 000) ( 2,000) ( 6,000)
Capitalbalance 76,000 38,
000 114,
000
Drawings ( 4, 000) ( 4,000) ( 8,000)
Capitalbalance,12/31/07 72,000 34,
000 106,
000
Netpr ofi
t-2008:
Annual salary 96,000 48,
000 144,
000
10%i nterestonBC 7,200 3,
400 10,
600
Bonust oJoe–NPBB– P 22000
NPAB( 22000/110%)200002, 000 2,
000
Balanceequal l
y (67,300) (67, 300)
(134,
600)
Total 37,900 (15,900) 22,
000
Total 109, 900 18,100 128,
000
Drawings ( 4, 000) ( 4, 000) ( 8, 000)

Capi
talbal
ance,
12/
31/
08 105,
900 14,
100 120,
000

2-
34:
a
Decr
easei
ncapi
tal P 60,
000
 Drawi
ngs (130,
000)
Contr
ibut
ion
25,
000
Pr
ofi
tshar
e 45,
000
Neti
ncome(45,
000÷30) P150,
000

30 Chapt
er2

SOLUTI
ONSTOPROBLEMS

Pr
obl
em 2–1

1. Castro : (
P26,
000/
P42,
500) x P23,
800 =
P14,560
Di
az : (
P16,
500/
P42,
500) x P23,
800 =
__
9,240
P23,
800

2. Castro : (
P31,
250/
P50,
000) x P23,
800 =
P14,875
Di
az : (
P18,
750/
P50,
000) x P23,
800 =
__
8,925
P23,
800

Comput
ati
onofAverageCapi
tal
s:
Castr
o: Capital Mont hs Peso
Date Balances Unchanged Months
1/1 P26,000 3 P 78,
000
4/10 29,000 1 29,
000
 5/
1 36,
000 3 108,
000
8/
1 32,
000 5 ¬_160,
000
12 P375,
000

Av
eragecapi
tal
=P375,
00012mont
hs= P31,
250

Di
az: Capital Mont hs Peso
Date Balances Unchanged Months
1/1 P16,500 5 P 82,
500
6/1 21,500 3 64,
500
9/1 19,500 4 __78,
000
12 P225,
000

Av
eragecapi
tal
=P225,
000–12mont
hs= P18,
750

3. CastroDiaz Total
I
nterest P 7,500P4,500 P12, 000
Sal
aries 36,00024,000 60, 000
Bal
ance,equal
l
y (
 24,100)(24,100)(
 48,
200)
Total P19, 400P4, 400 P23,800

4. Cast
roDiaz Total
Bonus( a) P 4,
760P  
  – P 4,
760
I
nterest(b) 1,
100– 1,
100
Bal
ance, 3:
2 _10,
764_7,176 _17,
940
Total P16,
624P7,176 P23,
800

Par
tner
shi
pOper
ati
ons 31

Comput
ations:
a. Netprofi
tbefor
ebonus P23,
800
Netpr
ofi
taferbonus(
t P23,
800125%) _19,
040
Bonus P4,760

b. Aver
agecapit
alofCastr (
o[P26,
000+P32,000)2] P29,
000
Aver
ageofDiaz[(
P16,500+P18,500)2] _18,
000
Cast
ro'
sexcess P11,
000
Mult
ipl
yby _
__10%
I
nter
est P 1,
100

5. Castro : (
P3,
000/
P5,
000) x P23,
800 =
P14,280
Di
az : (
P2,
000/
P5,
000) x P23,
800 =
__
9,520
P23,
800
 Pr
obl
em 2–2

a. Av
erageCapi
tal
:
Robi
n: Dat e Bal
ances Mont hs Peso
Unchanged Months
Jan.1 P135,
000 2 P270,
000
Feb.28 95,
000 2 190,
000
Apr.30 175,
000 5 875,
000
Sept.30 195,
000 3 __
585,
000
12 P1,
920,
000

Av
e.Capi
tal
(P1,
920,
00012)=P160,
000

Hood: Dat
e Bal
ances Mont hs Peso
Unchanged Months
Jan.1 P140,
000 3 P420,
000
Mar.31 200,
000 3 600,
000
June30 150,
000 2 300,
000
Aug.31 220,
000 2 440,
000
Oct.31 200,
000 2 __
400,
000
12 P2,
160,
000

Av
e.Capi
tal
(P2,
160,
00012)=P180,
000

Pr
ofi
tDi
str
ibut
ion:
Robi
n : P160,000P340,
000xP510,
000 = P240,
000
Hood : P180,000P340,
000xP510,
000 = _270,
000
P510,
000

32 Chapt
er2

b. Robi
n Hood Total
I
nterestonav e.capi
tal P 14,
400 P 16,
200 P 30,
600
Sal
aries 60,
000 100,
000 160,
000
Bonus( P510,
000–30, 600–160,
000)x25%) 78,
850 –
79,
850
Bal
ance, equall
y _119,
775 _119,
775 _239,
550
Total
s P274,
025 P235,
975 P510,
000

c. Robi
n Hood Tot
als
I
nterest
:
Robin(
P195,000–P135,
000)10% P 
 6,
000
Hood(P200,000–P140,
000)10% P  
6,000 P 12,
000
Bal
ance,equal
ly 249,
000 249,000 498,
000
Total
s 255,
000 255,000 510,
000

d. Robi
n Hood Tot
al
 Sal
aries P 80,
000 P120,
000 P200,
000
Bonus(seecomput ati
onsbel
ow) 62,
000 62,
000
Bal
ance,equall
y _124,
000 _124,
000 _248,
000
Total
s P266,
000 P244,
000 P510,
000
BonusComput ati
ons:
Netincomebef or
esalar
iesandbonus P510,
000
LessSalar
ies 200,
000
Netincomebef or
ebonus 310,
000
Netincomeafterbonus(P310,
000125%) _248,
000
Bonus P 62,
000

Pr
obl
em 2–3

a. DeVill
a DeVera Total
Sal
aries P 30,
000 – P 30,
000
Commi ssi on(
2%xP1, 000,000) P 20,
000 20,
000
I
nterestof8%onav eragecapit
al 32,
800 31,
200 64,
000
Bonus( seecomput ati
onsbelow) 9,
818 9,
818 19,
636
Bal
ance, equall
y _
_44,
182 __44,
182 __88,
364
Total P116,
800 P105,
200
P222,000
BonusComput ati
ons:
Incomebef oresalary
,commi ssi
ons,
int
erest&bonus
P222, 000
Salaryandcommi ssi
on(P30,000+P20,000) (
 50,000)
Interest (
 64,000)
Incomebef orebonus 108, 000
Incomeaf terbonus(P108,000110%) _ 98,182
Bonus P   
9,818

b. I
ncomeSummar y P 
222,
000
DeVil
l
a,capi
tal 116,
800
DeVera,
capit
al 105,
200
Par
tner
shi
pOper
ati
ons 33

Pr
obl
em 2–4

a. East Nort
h West Total
Sal
ar i
es P15,
000 P20,
000 P18,
000 P53,
000
Bonus( seecomputati
onbel
ow) 3,
760 3,
760
I
nterest(seecomputati
onbel
ow) 2,
800 4,
000 4,
800 11,
600
Bal
ance, 3:3:
4 __3,
180 __3,
180 __4,
240 _10,
600
Total P24,
740 P27,
180 P27,
040
P78,960

Bonuscomputat
ions:
Neti
ncomebef or
ebonus P78,
960
Neti
ncomeaf t
erbonus(
P78,
960105%) _75,
200
 Bonus P 
3,760
I
nter
estcomput at
ions:
East(10%xP28,000) P 2,
800
North(10%xP40,000) 4,
000
West( 10%xP48,000) __4,
800
Total P11,
600

b. East North West Tot al

I
nterest(seecomputati
onsbel
ow) P 3,
133 P 3,633 P 5,200 P11, 966
Sal
aries 24,
000 21,000 25,000 70,000
Bonus( seecomputati
onsbel
ow) 4,280 4,280
Bal
ance, equal
ly (
  
6,056) ( 
 6,055) ( 
 6,055) (
 18,166)
Total P21, 077 P22, 858 P24, 145
P68,080

I
nter
estcomputati
ons:
Aver
agecapital
s:
East
: Mont hs Pesos
Date Balances Unchanged Mont hs
1/1 P30,000 4 P120,
000
5/1 36,000 4 144,
000
9/1 28,000 4 _112,
000
12 P376,
000

Av
eragecapi
tal
(P376,
00012) P 31,
333

Nor
th: Mont hs Pesos
Date Balances Unchanged Mont hs
1/1 P40,000 2 P80,
000
3/1 31,000 4 124,
000
7/1 36,000 2 72,
000
9/1 40,000 4 _160,
000
12 P436,
000

Av
eragecapi
tal
(P436,
00012) P 
36,
333
34 Chapt
er2

West
: Mont hs Pesos
Date Balances Unchanged Mont hs
1/1 P50,000 3 P150,
000
4/1 57,000 2 114,
000
6/1 60,000 2 120,
000
8/1 48,000 5 _240,
000
12 P624,
000

Av
e.capi
tal
(P624,
00012) P 
52,
000

I
nter
estComput
ati
ons:
East(
10%xP31,333) P 
 3,
133
 Nor
th(10%xP36,
333) 3,
633
West(
10%xP52,000) _
_5,
200
Tot
al P 
11,
966

BonusComputati
ons:
Netincome P 
68,000
LessSalar
y _
21,000
Netincomebeforebonus 47,080
Netincomeafterbonus(
P47,
080110%) _
42,800
BonustoNorth P  4,
280
*ToTotal

c. East Nor
th West Total
Bonus( seecomp.bel
ow) P 
  
 8,
990 P 8,
990
Sal
ar i
es P21,
000 P   
18,
000 – 39,
000
I
nterestonbeginni
ngcapi
tal 3,
000 4,
000 5,
000 12,
000
Remai nder
,8:7:
5 _13,
180 _
11,532.
50 _
_8,
237.50 _32,
950
Total P37,
180P33,
532.50P22,
227.50
P92,940

BonusComput ati
ons:
Netincomebeforesalar
ies&bonus P92,
940
LessSalar
ies(P21,
000+P18,000) _39,
000
Netincomebeforebonus P53,
940
Netincomeafterbonus(P53,
940120%) _44,
950
BonustoWest P 8,
990

Pr
obl
em 2–5

a. Schedul
eofI
ncomeDi
str
ibut
ion:
Mari
a Cl
ara Rit
a Total
Sal
ar i
es P12,
000 P10,
000 P8,
000 P30,
000
I
nterest(
seecomput
ati
ononp.30) 7,
200 9,
600 13,
800
30,
600
Bal
ance,equal
ly _
_3,
133 __3,
133 __3,
134 __9,
410
Total P22,
333 P22,
733 P24,
934
P70,000
Par
tner
shi
pOper
ati
ons 35

I
nter
estonAverageCapi
tal
:
Mari
a:
P80,
000x8%x6months P 
3,200
P100,
000x5%x6months __
4,000 P 
7,200
Cl
ara:
P120,
000x8% 9,
600
Ri
ta:
P180,
000x8%x9Mos. P10,
800
P150,
000x8%x3Mos. __3,
000 _
13,
800
 Tot
al P30,
600

b. St
atementofPar
tner
sCapi
tal
:
Mar i
a Clara Ri
ta Tot al
Balances,Jan.1 P  80,000 P120, 000 P180, 000 P380, 000
Additi
onalInvest
ment 20,000 – – 20,000
CapitalWithdr
awal – – ( 
 30,000) ( 
 30,000)
NetIncome 22,333 22,733 24,934 70,000
Drawings ( 
 10,000) ( 
 10,000) ( 
 10,000) ( 
 30,000)
Balance,Dec.31 P112, 333 P132, 733 P164, 934 P410, 000

Pr
obl
em 2–6

1. Al
l
ocat
ionofnetl
ossf
or2008:
Alvi
nBennyCel
i
aTot
al
Sal
arytoAlvin P 
20,000P20,
000
I
nterest
sonav er
agecapit
al:
Alv
in(P120,
000x10%) 12,
000
Benny(P200,000x10%) 20,000
Celi
a(P220,000x10%) 22,00054,
000
Bal
ance,30:30:
40 (
29,
400)
_(29,
400)_
(39,
200)_
(98,
000)
Total P  2,
600P(
 9,
400)
P(17,
200)P(24,
000)

2. Stat
ementofPart
nershi
pCapit
al
YearEndedDecember31,2008
Alvi
nBennyCel i
aTotal
Capital
s,January1,2008 P120,000P180,000P220,000P520,000
Additi
onalinvest
ments 60,
00040,000 100, 000
Capitalwi
thdrawals __
_ __
_____
______(
20,000)_(
20,000)
Balances 120,000240,
000240,000600, 000
Netloss(seeabov e) __2,600__(
9,400)_
(17,200)_
(24,000)
Balances 122,600230,
600222,800576, 000
Drawings _(
16,000)___
_______
_____ (16,
000)
Capital
s,December31, 2008 P106,600P230,600P222,800P560,000
36 Chapt
er2

3. Cor
rect
ingent
ry:

Cel
i
acapi tal 2,400
Alvi
ncapital 2,200
Bennycapi tal 200
Tocorrectcapitalaccount
sforer
rori
nlossal l
ocationcomput edasf
oll
ows:
Alvi
nBenny Cel i
a
Cor
rectlossallocation P2,600P(9,400)
P(17,200)
Act
ual l
ossallocation __(400)__9,600__
14,800
Adj
ustment P2,200P  200P(  2,
400)
 Pr
obl
em 2–7

Dino Nelson Oscar Tot al

Capi
talbal
ances,1/ 2/06 P45,000 P45,000 P45, 000 P135, 000
Addi
ti
onalinvestment ,2006 _15,000 _15,000 __ 6,000 __ 36,000
Bal
ances 60,000 60,000 51, 000 171, 000
Neti
ncome( Loss)-2006, equal
l
y (
1,800) ( 
1,800) ( 
 1,800) (   
5,400)
Wit
hdrawals,2006 (
17,000) ( 
7,000) ( 
 3,200) ( 
 27,200)
Capi
talbal
ances,12/ 31/06 41,200 51,200 46, 000 138, 400
Addi
ti
onalinvestment ,2007 _____– _____– __ 6,000 ___6,000
Bal
ances 41,200 51,200 52, 000 144, 400
Neti
ncome-2007, 40: 30:30 10,800 8,100 8,100 27,000
Wit
hdrawals,2007 (
17,000) ( 
7,000) ( 
 3,200) ( 
 27,200)
Capi
talBal
ances, 12/31/07 35,000 52,300 56, 900 144, 200
Addi
ti
onalinvestment ,2008 ______– ______– _
__ 6,000 ___6,000
Bal
ances 35,000 52,300 62, 900 150, 200
Neti
ncome, 2008( schedule1) 56,365 42,272 20, 363 120, 000
Wit
hdrawals,2008 (
19,000) ( 
9,000) ( 
 3,200) ( 
 31,200)
Capi
talbal
ances,12/ 31/08 P72,365 P86,572 P80, 063 P239, 000

Schedul
e1:
Dino Nel
son Oscar Total
Annualsal
ari
es P48,000 P24,
000 P12,
000 P84,
000
Bonus(seecomput
ati
onsbel
ow) – 10,
909 – 10,
909
I
nterest 3,600 3,
600 3,
600 10,
800
Bal
ance,equal
ly _*4,765 __4,
763 __4,
763 __14,
291
Total
s P56,365 P43,
272 P20,
363 P120,
000

Bonuscomput at
ions:
Netincomebef orebonus P120,
000
Netincomeaf terbonus(
P120,
000110%) _109,
091
BonustoNel son P 10,
909

*ToTot
al
Par
tner
shi
pOper
ati
ons 37
Probl
em 2–8
Red,White&BluePart
nership
Stat
ementofPartner
s'Capital
ForYearEndedDecember31, 2008

Red Whit
e Bl
ue Gr
een Total
Balances,beginni
ngofy ear 40,
200 20,
200 40,
600 P101,
000
Add:20%off eesbil
ledtopersonal cli
ent
s 8,800 4,
8004,
400 18,000
Green'
sshar eoffees(ExhibitA) 3,200 3,
200
Remainingnetincome( ExhibitA) _
22,
800 _
22,800 _11,
400 __
_ _
__ _57,
000
Subtot
als _
71,
800 _
47,800 _56,
400 _
_3,200 179,
200
Less:Withdr
awal s 10,
400 8,
80011,
6005,
000 35,800
Uncoll
ectibl
eaccountsidentifi
ed
 withcli
entsofeachpar
tner 2,
400 900 3,
300
Excessrentchar
gedtoBlue 1,
800 1,
800
Totaldeduct
ions P12,
800 P 9,
700P13,
400P  
5,000P 40,
900
Bal
ances,endofyear P59,
000 P38,
100 P43, 000 P( 1,
800) P138,
300

Red,White&BluePart
nership
Exhi
bitA–Comput at
ionandDiv
isi
onofNeti ncome
ForYearEndedDecember31, 2008

Totalrevenuef rom f ees P120,

000
Expenses, excludingdepr eci
ati
onanddoubt ful
account sexpense P38,
700
Less: Excessr entchar gedtoN( $300x6) __1,
800
Subt otal 36,
900
Add:Depr eciation, computedasf ol
lows:
$26, 000x0. 10 2,
600
$10, 000x0. 10x1/ 2 _
__ _
500
Totalexpenses, excludi ngdoubtfulaccountsexpense P40,
000
Add:Doubt fulaccount sexpense( $3,
000x0. 60) _
_1,
800
Totalexpenses 41,
800
_____
_ __
Netincomef ory earendedDec.31, Year1 P 
78,
200

Di
visi
onofneti ncome:
Feesbi l
ledt oper sonalcl
ients:
RedP44, 000x20% P 8,
800
Whi teP24, 000x2% 48,
000
Blue, P22, 000x20% 4,
400 P18,
000
Green'sshar eoff ees:
Gr ossf eesf rom newcl ientsafterApri
l1,Year1 24,
000
Less: Allocat edexpenses( $40,
000x$24, 000/
$120, 000) __8,
000
Neti ncomef rom newcl ients P16,
000
Gr een'sshar e( P16,
000x20%) P 
3,200
Total dividedpur suantt ospecial
agreement
__21,200
Balance, dividedi nincome- shari
ngrati
oasf ol
lows: P 
57,
000
ToRed, 40% P22,
800
ToWhi t
e, 40% 22,
800
ToBl ue, 20% _11,
400
Total P57,
000
38 Chapt
er2

Pr
obl
em 2–9

All
an,EmanandGinoPartner
shi
p
Stat
ementofProf
itDi
str
ibuti
on
YearEndedDecember31,2008

Al
l
an 
Eman 
Gino 
Tot
al 
I
nter
est P 
4,000P 
 750 P 
 250P 
 5,
000
Commissi
on(P16,
120–P5,
000)x10% –1,1121,
1122,
224
Bal
ance,
equal
ly _
_5,
926_5,925_
5,925 _
17,
776
Tot
al P 9,
926P7,787P7,
287P25,
000
Adj
ust
ment
s(50%ofP25,
000t
oAl
l
an) _
_2,
574(1,
287)(
1,287) _
____
–
Tot
al P12,
500P6,
500P6,
000P25,
000

Pr
obl
em 2–10

Gary,Sonny
,andLett
yPartnership
Stat
ementofPartner
s'Capit
al Account
s
YearEndedDecember31,2008

Gar
y  
Sonny
 Let
ty 
  Tot
al 
 
Capi
talbal
ances,
1/1/
08 P210,
000P180,
000P 90,
000P480,000
Addi
ti
onalinv
estment
s _
__9,
100__
____
____
__ _
___9,100
Total _
219,
100_
180,
000_
90,
000
489,100
Profi
tdistribut
ion:
Sal
aries 13,68011,
520 10,64035,
840
I
nterest 25,92021,
600 10,80058,
320
Bonust oGaryandSonny(
Schedul
e1) –– –
Bal
ance, equal
ly _
_(9,
720)
_(9,
720)_(
9,720)
(29,
160)
Tot
al _
_29,
880_
23,
400_
11,
720
_
65,
000
Total 248,
980203,
400101,
720
554,100
Drawings _
(21,
000)
(18,
000)
__(
9,000)
_(48,
000)
Capi
tal
bal
ances,
12/
31/
08 P227,
980P185,
400P 
92,
720P506,
100

Schedul
e1:Comput
ati
onoft
hebonus.

Netprofi
tbeforei
nter
est
,sal
ari
esandbonus P 
65,
000
Less: Salar
ies P35,
840
I
nterest _ 58,
320__
94,
160
Netpr
ofi
t(l
oss)bef
orebonus P(
29,
160)

Ther
efor
enobonusi
stobegi
vent
oGar
yandSonny
.
Par
tner
shi
pOper
ati
ons 39
Pr
obl
em 2–11

a.Ent
ri
est
orecor
dthef
ormat
ionoft
hepar
tner
shi
pandt
heev
ent
sthatoccur
reddur
ing
2008:

Cash 1,
100,
000
I
nvent
ory 800,
000
 Land 1,
300,
000
Equi
pment 1,
000,
000
Mortgagepay able 500,
000
Inst
all
mentnot epayable 200,
000
Kobe,capital(
P600,000+P800,000
+P1,000,
000–P200,000) 2,
200,
000
Lebron,capit
al(P500,
000+P1,300,
000
-P500,
000) 1,
300,
000

(
1) I
nventory 300,
000
Cash 240,
000
Account
spay
abl
e 60,
000

(
2) Mort
gagepay abl
e 50,
000
I
nter
estexpense 20,
000
Cash 70,
000

(
3) I
nstall
mentnot epay
abl
e 35,
000
I
nterestexpense 20,
000
Cash 55,
000

(
4) Account
srecei
vabl
e 210,
000
Cash 1,
340,
000
Sal
es 1,
550,
000

(
5) Sel
l
ingandgeneralexpenses 340,
000
Cash 278,
000
Accr
uedexpensespay abl
e 62,
000

(
6) Depr
eci
ati
onexpense 60,
000
Accumul
ateddepreci
ati
on 60,
000

(
7) Kobe,drawi
ng 104,
000
Lebr
on,drawing 104,
000
Cash 208,
000

(
8) Sal
es 1,
550,
000
I
ncomesummar
y 1,
550,
000

(
9) Costofgoodssol
d 900,
000
I
nvent
ory 900,
000
P900,
000=P800,
000beginningi
nventor
y
+300,
000purchases
- 200,000endi
nginvent
ory

40 Chapt
er2

I
ncomesummar y 1,
340,
000
Costofgoodsold 900,
000
Sel
li
ngandgeneralexpenses 340,
000
Depreci
ati
onexpense 60,
000
 I
nter
estexpense 40,
000

I
ncomesummar y 210,
000
Kobe,capital 105,
000
Lebr
on, capit
al 105,
000

Kobe,capital 104,
000
Lebr
on, capit
al 104,
000
Kobe, dr
awing 104,
000
Lebron,drawi
ng 104,
000

Schedul
etoal
l
ocat
epar
tner
shi
pneti
ncomef
or2008:

Kobe Lebron Tot

al
Prof
itper centage 60% 40% 100%
Beginningcapi t
al balance P2,200,
000 P1,300,
000P3,
500,000
Netincome( P1,550,000revenue
-P1, 340,000expenses) 210,
000
I
nterestonbegi nningcapit
al
balances( 3%) 66,
000 39,000 ( 105,
000)
P105, 000
Sal
ari
es 120,
000120,000 ( 240,
000)
P(135, 000)
Residual
def
ici
t (
81,
000) (54,000) ( 135,
000)
Total P105,
000P105, 000 -0-

b. Kobe-Lebr
onPart
ner
ship
IncomeStat
ement
Fort
heYearEndedDecember31,
2008

Sales P1,
550,
000
Less:Costofgoodssol d:
Inventory,January1 P800, 000
Purchases 300,000
Goodsav ail
ableforsale P1,100,000
Less:Inventory,December31 (200,000)(900,000)
Grosspr ofi
t P650, 000
Less:Selli
ngandgener alexpenses 340,000
Depr eci
ationexpenses 60,000 400, 000
Operatingincome P250, 000
Nonoper ati
ngexpense-i nter
est (40,000)
Netincome P210, 000

Par
tner
shi
pOper
ati
ons 41

c. Kobe-LebronPartner
shi
p
BalanceSheet
AtDecember31, 2008

Asset
s
Cash P1,
589,
000
Accountsrecei
vabl
e 210,
000
Inv
entory 200,
000
Land 1,
300,
000
Equipment(net
) 940,
000
Totalasset
s P4,
239,
000

Li
abi
l
iti
esandCapi
tal
Li
abilit
ies:
Account spay abl
e P60,
000
Accr uedexpensespay abl
e 62,
000
Install
mentnot epay
abl e 165,
000
Mor tgagepay abl
e 450,
000
Totalli
abili
ti
es P737,
000
Capital:
Kobe, capital P2,
201,000
Lebr on,capit
al 1,
301,000
Totalcapital 3,
502,000
Totalli
abili
ti
esandcapital P4239,000