Beruflich Dokumente
Kultur Dokumente
SY 2015- 2016
PRACTICAL ACCOUNTING II
OPERATION
PROBLEM 1.
Kram and Yazi decided to form a partnership on May 01, 201. Their Statement of Financial
Position on this date are:
Kram
Yazi
Cash
65,625.00
164,062.50
Accounts Receivable
1,487,500.00
896,875.00
Merchandise Inventory
875,000.00
885,937.50
Equipment
656,250.00
1,268,750.00
3,084,375.00
3,215,625.00
Accounts Payable
459,375.00
1,159,375.00
Kram, Capital
2,625,000.00
Total
Yazi, Capital
Total
2,056,250.00
3,084,375.00
3,215,625.00
P2 - 01
PROBLEM 2.
On January 01, 2015, Kram and Yazi agreed to form a partnership. The following are their
assets and liabilities:
Kram
Yazi
Cash
136,000.00
Accounts Receivable
88,000.00
Inventory
304,000.00
364,000.00
Machinery
480,000.00
440,000.00
Accounts Payable
216,000.00
144,000.00
Notes Payable
140,000.00
60,000.00
76,000.00
48,000.00
Kram decided to pay-off his notes payable from his personal assets. It was also agreed that
Yazi inventories were overstated by 24,000.00 and Kram machinery was over depreciated
by 20,000.00. Yazi invest/withdraw cash in order to receive a capital credit that is 20%
more than Krams total net investment in the partnership. How much cash will be presented
in the partnerships statement of financial position?
PROBLEM 3.
On December 1 2014, Kram and Yazi agreed to invest equal amounts and share profits
equally to form a partnership. Kram invested 3,120,000 cash and a piece of equipment.
Yazi invested some assets which are shown below:
Particulars
Accounts Receivables
Inventory
Machineries, Net
Intangibles, Net
Book Value
400,000
1,120,000
2,240,000
920,000
The assets invested by Yazi are not properly valued. 32,000 of the accounts receivables are
proven uncollectible. Inventories are to be written down to 1,040,000. Included in the
machineries is an obsolete apparatus acquired for 384,000 with an accumulated
depreciation balance of 336,000. Part of the intangibles is a patent with a carrying value of
56,000 which was sued upon by a competitor. Yazi unsuccessfully defended the case and
the final decision of the court was released on November 29, 2014. What is the fair value of
the equipment invested by Kram?
PROBLEM 4.
P2 - 01
On December 1 2014, Kram invited Yazi to join him in his business. Yazi agreed provided that
Kram will adjust the accumulated depreciation of his equipment account to a certain
amount, and will recognize additional accrued expenses of 50,000. After that, Yazi is to
invest additional pieces of equipment to make her interest equal to 45%. If the capital
balances of Kram before and after the adjustment were 695,000 and 605,000
respectively, what is the effect in the carrying value of the equipment as a result of the
admission of Kram?
PROBLEM 5.
On December 1 2014, Kram and Yazi are combining their separate business to form a
partnership. Cash and noncash assets are to be contributed, The noncash assets to be
contributed and the liabilities to be assumed are as follows:
Particulars
Kram
Book Value
Fair Value
Yazi
Book Value
Fair Value
Accounts
Receivables
250,000
262,500
200,000
195,000
Inventory
400,000
450,000
200,000
207,500
PPE
1,000,000
912,500
862,500
822,500
Accounts Payable
150,000
150,000
112,500
112,500
Kram and Yazi are to invest equal amount of cash such that the contribution of Kram would
be 20% more than the investment of Yazi. What is the amount of cash presented on the
partnerships Statement of Financial Position on December 1, 2014?
PROBLEM 6.
KY Partnership began operations on June 01, 2014. On that date, Kram and Yazi have capital
credits of 175,000 and 240,000, respectively. The partnership has the following profitsharing plan:
60,000 and 75,000 annual salaries for Kram and Yazi, respectively.
Remaining profit will be divided to Kram and Yazi on a 3:2 ratios, respectively.
During the year, Kram invested 150,000 worth of merchandise and withdrew 40,000
cash, while Yazi invested 120,000 cash. The partnership earned a profit 266,375 during
the year. How much is Krams capital balances at the end of 2014?
PROBLEM 7.
Kram and Yazi are partners who have the agreement to share profit and loss in the following
manner:
Kram
Yazi
P2 - 01
Annual Salaries
Interest on average balances
Bonus (based on net income after salaries and
interest)
Remainder
261,000
5%
259,000
10%
10%
50%
50%
During the year ended December 31, 2014, the partnership generated a profit of 575,000
before any deductions. Krams and Yazis average capital balances for the year are 600,000
and 300,000, respectively. Income is distributed to the partners only as far as it is
available. How much is the total share of Yazi in the net income for the year ended 2014?
PROBLEM 8.
The following Statement of Financial Position for the Partnership of Eren, Mikasa and Armin
were taken from the books on October 01, 2014.
Assets
Cash
P
100,000.00
Other Assets
400,000.00
Total Assets
500,000.00
Bonus of 15% to Eren based on income after salaries, interest and bonus
The partnership began its operation on Oct, 01 2014 and net income as of Dec. 31, 2014 is
69,500. How much is the share of Eren in the net income?
PROBLEM 9.
Kram and Yazi are partners engaged in a manufacturing business. Transactions affecting the
partners capital accounts in 2014 are as follows:
Kram
Dr
Beg. Balance
April 01, 2015
Yazi
Cr
200,000
Dr
Cr
280,000
P2 - 01
120,000
80,000
100,000
200,000
180,000
240,000
280,000
160,000
Salaries of 100,000 and 140,000 are given to Kram and Yazi, respectively.
Bonus to Yazi at 25% of net income after deducting interest and salaries but before
deducting bonus
How much is the net/increase decrease in Yazi capital account during 2014?
PROBLEM 10.
Kram and Yazi are partners of KY partnership begin its first year of operations on June 01,
2014 with the following capital balances:
Kram, Capital
Yazi, Capital
1,440,000
720,000
According to the partnership agreement, all profits and losses will be distributed as follows:
Kram will be allowed an annual salary of 960,000 while Yazi will be allowed a
monthly salary of 112,000
The partners will be allowed with interest equal to 15% of the capital balance as of
the first day of the year.
Yazi will be allowed a bonus 12% of the net income after bonus
Assume that the results of operations in 2014 from the date of formation are 560,000 net
income and 280,000 net losses on the following year. Assume further that each partner
withdraws the maximum amount from the business each period.
Which of the following statements is wrong?
a) The capital balance of Kram at end of 2015 is 1,242,925
b) The share of Yazi in the net loss in 2015 is a credit to capital account of 14,575
P2 - 01
c) There is a net increase of 97,500 in the capital account of Kram from beginning to
end of 2014.
d) The capital balance of Yazi at the end of first year is 1,038,500
P2 - 01