Practical Accounting 2 Straight Problem No. 6

| Tweet Newscaster

In solving for this quiz, refer to previous problems.

Profit-sharing for Sugarpop Partnership was again revised as follows:

  1. Respective salaries for Renzo, Pocholo, Vanessa, and Julie Ann were P2,500; P3,000; P2,750; and P2,250 per month.
  2. All partners are to be credited 10% interest on their balances as of December 31, 2017.
  3. A bonus of 5% of net income after bonus shall be given to Pocholo.
  4. Remainder is to be divided on their new capital and P/L ratio. (Hint: Revised respective Capital and P/L ratios after Julie Ann’s admission will be 25%, 17%, 18%, and 40%, respectively for Renzo, Pocholo, Vanessa, and Julie Ann.)

Additional information:

  1. A portion of unexpired rent used from April to December is to be recognized.
  2. Profit reported for the year was P1,055,000. This does not include the whole deferred revenue of P25,000 realized during the period.

Requirement:

  1. Prepare schedule of distribution of profits.
  2. Adjusting entries.
  3. Statement of financial position as of December 31, 2018.

Leave a comment