Advanced accounting by baysa lupisan chapter 04a

EXERCISES Exercise 4 - 1

Paulo, Edwin and Marco Worksheet Summarizing Joint Venture Transactions

May 12 to 26, 2008

P 93,000 P159,000 P 80,000 P 75,000 P35,000 P10,000 P44,000 P 8,000

P159,000 P159,000 Distribution of profit:

P109,815 P109,815 P35,000 P35,000 P44,000 P44,000

Cost of sales (P153,000 / 180%**) 85,000

Value upon which participants can purchase inventory x 80%

Value assigned to the inventory taken by Lito P 4,000

Exercise 4 – 3

Books of Jolly Books of Bernie Books of Sonny

To set up inventory, end Joint Venture Invty 110,000 Jolly 110,000 Jolly 110,000

(should be set up before Joint Venture 110,000 Joint Venture 110,000 Joint Venture 110,000 recognizing gain or loss)

To recognize gain or loss, Joint Venture 160,000 Joint Venture 160,000 Joint Venture 160,000

shared 4:2:2 Income from JV 80,000 Jolly 80,000 Jolly 80,000 NI=P50,000 + P110,000 Bernie 40,000 Income from JV 40,000 Bernie 40,000

Sonny 40,000 Sonny 40,000 Income from JV 40,000

To record settlement with Sonny 78,000 Sonny 78,000 Cash 62,400

Sonny* JV Cash 62,400 Jolly 72,800 Loss from JV 15,600

Income from JV 10,400 Income from JV 5,200 Bernie 72,000

* Interest of Sonny (P38,000 + P40,000) P78,000

Bonus to Jolly and Bernie (P78,000 x 20%) 15,600

The bonus to Jolly and Bernie represents a gain to them and a loss to Sonny The P15,600 bonus shall be shared by Jolly and Bernie in the ratio of 4:2 The, the sharing is as follows: Jolly – P15,600 x 4/6 = P10,400; Bernie – P15,600 x 2/6 = P5,200

Problem 4-1

Dario, Val, and Rene Worksheet Summarizing Joint Venture Transactions

August 7 - 10, 2008

46,250 46,250 Distribution of profit:

Purchases P10,000 + P15,000 P25,000

Cost of Sales P45,000/200% 22,500

Inventory end P 2,500

X 50%

Inventory value taken by Dario P 1,250