Exercise 4-2Books of Alvin, Managing Partner 10% commission on net purchases to Alvin 25% commission on own sales Books of Larry 10% commission on net purchases to Alvin 25% commission
Trang 1Exercise 4-2
Books of Alvin, Managing Partner
10% commission on net purchases to Alvin 25% commission on own sales
Books of Larry
10% commission on net purchases to Alvin 25% commission on own sales
Trang 2Problem 4-2
Requirement 1
Books of Roland, Managing Partner
Improvements on land
Sales by venturers
Sales by salesmen
Venture expenses
Salaries to Roland as managing partner
10% commission on own sales
Balance of profit divided equally
Final cash settlement
Trang 3Books of Greg
Improvements on land
Sales by venturers
Sales by salesmen
Venture expenses
Salaries to Roland as managing partner
10% commission on own sales
Balance of profit divided equally
Final cash settlement
Trang 4Books of Medel
Improvements on land
Sales by venturers
Sales by salesmen
Venture expenses
Salaries to Roland as managing partner
10% commission on own sales
Balance of profit divided equally
Final cash settlement
Trang 5Problem 4-2
Requirement 2
Books of the Joint Venture
Trang 6Books of Greg
Books of Medel
Books of Roland
Problem 4-3
Books of Marissa
Trang 74 Joint Venture 40,000
Interest on investment
Commission on sales
Allocation of the balance
Books of Yolly
Interest on investment
Trang 87 Joint Venture 8,000
Commission on sales
Allocation of the balance
Books of Beth
Interest on investment
Commission on sales
Allocation of the balance
Trang 9Requirement 2
Books of the Joint Venture
Books of Yolly
P660 + P5,646 = P6,306
Trang 104 Cash 40,306
Books of Beth
P900 + P5,647 = P6,6,547
Books of Marissa
P8,000 + P5,647 = P13,647
Problem 4-4
Bonus = 10% (NI – B)
Bonus = 10% (P53,636.20 – B) = P4,785
Distribution of balance – 30%, 50%, and 20% to
Noel, Santi, and Romy, respectively
Final cash settlement
Trang 11Problem 4-5
Books of Leo
Bonus = 20% (NI – B)
Bonus = 20% (P24,000 – B) = P4,000
Interest on deficiency and excess
Leo = P10,000 x 12% x 6/12 = P600
Mandy = P5,000 x 12% x 6/12 = P300
Balance of profit divided in the ratio of 4:4:2 to
Leo, Niel, and Mandy, respectively
Books of Mandy
Books of Niel
Trang 12MULTIPLE CHOICE
1 A Total credits in the Joint Venture account P258,100
Less Total debits in the Joint Venture account 197,500 Gain (excess of credit over debit) P 60,600
Add Share in the gain (P60,600 x 2/10) 12,120
3 A The account of Melissa has a debit balance, thus, she has to make payment
The account of Nancy has a debit balance, thus, she has to make payment The account of Olivia has a credit balance, thus, she has to receive payment
4 C P150,000 + P105,000 = P255,000
5 C P120,000 + (135,000/3) = P165,000
Unsold merchandise taken by Tan ( 105,000) Share on the venture income (P135,000* / 3) 45,000 Amount received by Tan in final settlement P210,000
* Credit balance in the Joint Venture account P150,000
Unsold merchandise taken by Tan 105,000
7 B 15% (P115,000 –B) = P15,000
8 C Credit balance in the Joint Venture account P 90,000
Unsold merchandise purchased by Soriente 25,000
Bonus to Soriente [ 15% (P115,000 – B) 15,000
9 C P100,000 x 40% = P40,000
Share in venture profit 40,000 35,000
Trang 1311 C Sales P240,000
Cost of sales:
Contributed merchandise P156,000 Less Returned merchandise 26,400 129,600
Operating expenses (P6,450 + P58,650) 65,100
Less Bonus (P41,250 x 25/125) 8,250
12 B P41,250 x 25/125 = P8,250
Interest on original capital 990 1,350 Balance of profit divided equally 10,220 10,220
Purchases 300,000 Sales 559,50
0 Expenses 34,500
Balance, end 225,000
0 Sales revenue is a credit entry in the Joint Venture account The total of the purchases, expenses and the ending balance is equal to total sales revenue The ending balance is the sum of the credit balances of Marc and Martin of P120,000 and P105,000
15 B P236,500 x 50% = P118,250
Cost of unsold goods assumed by Marc ( 4,500) Share in the joint venture gain:
Credit balance in the JV account P225,000 Unsold goods assumed by the partners 11,500
Share of Marc 50% 118,250
17 B P12,000 – P2,500 = P9,500
Less Share on loss (P12,000 – P2,500) 4,750 4,750
P 5,250 (P2,750)
Trang 14Additional loss to Debbie ( 2,750) 2,750
Less Investment 300,000 300,000
Less Expenses – disbursements (P622,750 + P706,950) 1,329,750
20
21 B Debit to Joint Venture account:
Investment of Santos (12,000 shares @ P45) P540,000.00 Investment of Cruz (8,000 shares @ P45) 360,000.00 Manager’s fee [ 1% (176,000 + 240,000 + 133,000 +261,625)] 8,106.25
P909,606.25 Credit to Joint Venture account:
Cash dividend [(12,000 + 8,000 – 4,000 – 6,000) x P2] 20,000.00
Sales [(10,000 – 3,500) x 115% = 7,475 shares x P35] 261,625.00
P830,625.00 Net loss of the venture (P909,606.25 – P830,625) P 78,981.25
22 D Investment of Cruz (8,000 shares @ P45) P360,000.00
Less Share in JV net loss (P78,981.25 x 8/20) 31,592.50 Share of Cruz after distribution of proceeds P328,407.50
23 B Loss upon the investment of shares (8,000 shares @ P10) P 80,000.00
Loss of Cruz on the disposition of Palawan Oil Co shares P 111,592.50 Loss on the disposition of the shares of Cruz is the total of the loss upon investment of the shares (i.e P45 – P55 = P10 per share) and the share on the net loss of the dissolved joint venture
24 A 20,000 shares x P40 MV = P800,000
25 A 20,000 – 4,500 + 15,500 x 120% = 18,600 – 5,000 = 13,600 x P1 = P13,600
26 B Proceeds from sale of shares;
Trang 15Loss from sale of the shares P 43,000
Dividend revenue Number of shares after stock dividend 18,600 Less shares sold on November 5 5,000 Shares entitled to cash dividend 13,600 Dividend per share x P1 13,600
x 6/20 Share of Roxas on the venture loss P11,130
Shares sold on Oct 20 4,500
Shares received as stock dividend (20% x 15,500) 3,100 Shares sold on Nov 5 and 22 (11,000)
27 D 20,000 – 4,500 = 15,500 x 20% = 3,100
Share on the joint venture loss (P37,100 x 1/2 ) 18,550 Share of Silverio on the distribution of proceeds P381,450
29 A Loss upon contribution of the shares [(P40 – P62) x 4,000] P88,000
Share on the JV loss (P37,100 x 4/20) 7,420 Tan’s loss on disposition of his investment in Golden Copper P95,420