KC Cruz and JD Suarez are partners of Cebu Vintage Car. The income and expense summary
account before final closing shows a credit balance of P500, 000 at the end of the fiscal year. The
following were taken from their respective capital account ledgers: (Please see the assumptions
below)
KC Cruz
Jan. 1 Balance 750, 000
Oct. 1 Withdrawal 70, 000
Dec. 1 Investment 50, 000
JD Suarez
Jan. 1 Balance 700, 000
March 1 Investment 80, 000
Nov. 1 Withdrawal 10, 000
Dec. 1 Investment 40, 000
Required: (Please see the assumptions below)
Show how profit is distributed to partners and journal entry to close the income and expense
summary account under the following assumptions:
a. Annual salaries of P45, 000 and P30, 000 given to Cruz and Suarez; 10% interest based on
beginning capital balance of each partner: Bonus to Suarez of 20% of profit after bonus and after
salaries and remainder to be divided equally.
b. 15% interest is allowed to partners based on the average capital balance; annual salaries to
each partner, P50, 000 and P20, 000 respectively; Bonus to Suarez of 20% of profit after bonus,
and balance for distribution is to be divided based on beginning capital balance.
c. Annual salaries of P45, 000 and P30, 000; 8% interest based on ending capital balance of each
partner: Bonus to Suarez of 20% of profit before bonus, after salaries, after interest and
remainders to be divided based on arbitrary ratio of 3:2.
d. Annual salaries of P120, 000 and P100, 000 respectively; Bonus to Suarez of 25% of profit
before bonus , before salaries to both ; remainder is divided based on average capital ratio.
following were taken trom their respective capital account ledgers: (Please see the assumptions
below) KC Cruz Jan. 1 Balance 750, 000 Oct. 1 Withdrawal 70,000 Dec. 1 lnvestment 50,000 JD
Suarez Jan. 1 Balance 700, 000 March 1 lnvestment 80,000 Nov. 1 Withdrawal 10, 000 Dec. 1
lnvestment 40,000 Required: (Please see the assumptions below) Show how profit is distributed
to partners and journal entry to close the income and expense summary account under the
following assumptions: a. Annual salaries of P45,000 and P30,000 given to Cruz and Suarez;
10% interest based on beginning capital balance of each partner: Bonus to suarez of 20% of
profit after bonus and after salaries and remainder to be divided equally. b. 15% interest is
allowed to partners based on the average capital balance; annual salaries to each partner, P50,
000 and P20, 000 respectively; Bonus to suarez of 20% of profit after bonus, and balance for
distribution is to be divided based on beginning capital balance. c. Annual salaries of P45, 000
and P30, 000; 8\% interest based on ending capital balance of each partner: Bonus to Suarez of
20% of profit before bonus, after salaries, after interest and remainders to be divided based on
arbitrary ratio of 3:2. d. Annual salaries of P120, 000 and P100, 000 respectively; Bonus to
Suarez of 25% of profit before bonus, before salaries to both ; remainde.
KC Cruz and JD Suarez are partners of Cebu Vintage Car. The income a.pdf
1. KC Cruz and JD Suarez are partners of Cebu Vintage Car. The income and expense summary
account before final closing shows a credit balance of P500, 000 at the end of the fiscal year. The
following were taken from their respective capital account ledgers: (Please see the assumptions
below)
KC Cruz
Jan. 1 Balance 750, 000
Oct. 1 Withdrawal 70, 000
Dec. 1 Investment 50, 000
JD Suarez
Jan. 1 Balance 700, 000
March 1 Investment 80, 000
Nov. 1 Withdrawal 10, 000
Dec. 1 Investment 40, 000
Required: (Please see the assumptions below)
Show how profit is distributed to partners and journal entry to close the income and expense
summary account under the following assumptions:
a. Annual salaries of P45, 000 and P30, 000 given to Cruz and Suarez; 10% interest based on
beginning capital balance of each partner: Bonus to Suarez of 20% of profit after bonus and after
salaries and remainder to be divided equally.
b. 15% interest is allowed to partners based on the average capital balance; annual salaries to
each partner, P50, 000 and P20, 000 respectively; Bonus to Suarez of 20% of profit after bonus,
and balance for distribution is to be divided based on beginning capital balance.
c. Annual salaries of P45, 000 and P30, 000; 8% interest based on ending capital balance of each
partner: Bonus to Suarez of 20% of profit before bonus, after salaries, after interest and
remainders to be divided based on arbitrary ratio of 3:2.
d. Annual salaries of P120, 000 and P100, 000 respectively; Bonus to Suarez of 25% of profit
before bonus , before salaries to both ; remainder is divided based on average capital ratio.
following were taken trom their respective capital account ledgers: (Please see the assumptions
below) KC Cruz Jan. 1 Balance 750, 000 Oct. 1 Withdrawal 70,000 Dec. 1 lnvestment 50,000 JD
Suarez Jan. 1 Balance 700, 000 March 1 lnvestment 80,000 Nov. 1 Withdrawal 10, 000 Dec. 1
lnvestment 40,000 Required: (Please see the assumptions below) Show how profit is distributed
to partners and journal entry to close the income and expense summary account under the
following assumptions: a. Annual salaries of P45,000 and P30,000 given to Cruz and Suarez;
10% interest based on beginning capital balance of each partner: Bonus to suarez of 20% of
profit after bonus and after salaries and remainder to be divided equally. b. 15% interest is
2. allowed to partners based on the average capital balance; annual salaries to each partner, P50,
000 and P20, 000 respectively; Bonus to suarez of 20% of profit after bonus, and balance for
distribution is to be divided based on beginning capital balance. c. Annual salaries of P45, 000
and P30, 000; 8% interest based on ending capital balance of each partner: Bonus to Suarez of
20% of profit before bonus, after salaries, after interest and remainders to be divided based on
arbitrary ratio of 3:2. d. Annual salaries of P120, 000 and P100, 000 respectively; Bonus to
Suarez of 25% of profit before bonus, before salaries to both ; remainder is divided based on
average capital ratio.
