Reference no: EM132944733

Question -

Q1. Ember and Void agreed to combine their existing resources to acquire and sell tickets for an MMA fight deemed the "fight of the century". Their agreement stipulates the following:

a. Each party is entitled to a 5% commission on purchases and 20% commission on sales.

b. Any profits shall be shared equally.

c. Each party shall record its own transactions relating to the arrangement.

Ember made total purchases of P1,000,000 and total sales of P1,200,000. Void made total purchases of P800,000 and total sales of P1,500,000. Ember and Void incurred expenses of P20,000 and P30,000, respectively, on account of the arrangement. The parties agreed to charge the P200,000 cost of unsold tickets as loss.

Requirements:

i. Compute for the profit of the joint operation.

ii. Compute for the joint operators respective shares in the profit.

iii. Compute for the cash settlements between the joint operators

Q2. On December 31, 2020, EE and FF fired a partnership, agreeing to share for profits and losses in the ratio of 2:3, respectively. EE invested a parcel of land that cost him P25,000. FF invested P30,000 cash. The land was sold for P50,000 on the same date, three hours after formation of the partnership. How much should be the capital balance of EE right after formation?

Q3. On August 1, AA and BB pooled their assets to form a partnership, with the firm to take over their business assets and assume the liabilities. Partners capitals are to be based on net assets transferred after the following adjustments. (Profit and loss are allocated equally.

BB's inventory is to be increased by P4,000; an allowance for doubtful accounts of P1,000 and P1,500 are to be set up in the books of AA and BB, respectively; and accounts payable of P4,000 is to be recognized in AA's books. The individual trial balances on August 1, before adjustments, follow:

AA BB

Assets P75,000 P113,000

Liabilities P5,000 P34,500

What is the capital of AA and BB after the above adjustments?

Q4. Lancelot is trying to decide whether to accept a salary of P40,000 or a salary of P25,000 plus a bonus of 10% of net income after salary and bonus as a means of allocating profit among the partners. Salaries traceable to the other partners are estimated to be P100,000. What amout of income would be necessary so that Lancelot would consider the choices to be equal?

Q5. AA. BB, and CC are partners with average capital balances during 2019 of P360,000, P180,000, and P120,000, respectively. Partners receive 10% interest on their average capital balances. After deducting salaries of P90,000 to AA and P60,000 to CC the residual profit or loss is divided equally. In 2019 the partnership sustained a P99,000 loss before interest and salaries to partners. By what amount should AA's capital account change?

Q6. MM, and OO are partners with capital balances of P50,000 and P70,000, respectively, and they share profits and losses equally. The partners agree to take PP into the partnership for a 40% interest in capital and profits, while MM and OO each retain a 30% interest. PP pays P60,000 cash directly to MM and OO for his 40% interest, and goodwill implied by PP's payment is recognized on the partnership books. If MM and OO transfer equal amounts of capital to PP, the capital balances of MM, OO, and PP after PP's admittance will be:

Q7. Larry, Masha, and Natalia are partners in a company that is being liquidated. They share profits and losses 55%, 20%, and 25%, respectively. When the liquidation begins they have capital account balances of P108,000, P62,000, and P56,000, respectively. The partnership just sold equipement with a historical cost and accumulated depreciation of P25,000 and P18,000, respectively for P10,000. What is the balance of Masha's capital account after the transaction is completed?

Q8. PP, QQ, and RR, partners to a firm, have capital balances of P11,200, P13,000, and P5,800, respectively, and share profits in the ratio of 4:2:1. Who among the partners shall be paid first with an available cash of P1,400?

Q9. Khufra, Inc. has forced into bankruptcy and has begun to liquidate. Unsecured claims will be paid at the rate of 40 cents in the peso. Atlas Co. holds a collaterialized by machinery with a liquidation value of P25,000. The total amount to be realized by Atlas on this note receivable is?

Q10. Lapu-lapu Corporation's shipments to and from its Bislig City branch are billed at 120% of cost. On December 31, Bislig Branch reported the following data, at billed prices: inventory, January 1, of P33,600; shipments received from home office of P840,000; shipments returned of P48,000; and inventory, December 31, of P36,000. What is the balance of the allowance for over valuation of branch inventory on December 31 before adjustments?

Q11. The Vale Sales Company established a branch in Valir City early last year. It shipped merchandise and billed the branch for P300,000 prior to its opening. For the year, it made additional shipments at billed price of P120,000. Within the year, the branch shipped back P7,500 inventory and got the credit memo for said returns. On the last working day of the year, an inventory count was made. Ending inventory of P185,000 was established consisting of purchases from third parties at P20,000, with the balance coming from home office shipments at billed price. The home office billed the branch at 20% above cost. The total purchases of the branch from outside suppliers amounted to P72,500. The total cost of goods available for sale by the branch at cost (net of overvaluation and returns) amounted to:

Use the following information for questions: Harith, Lylia, and Nana sign an agreement to collectively purchase a yacht and to hire a company to manage and operate the yacht in their behalf. The costs involved in running and operating the yacht business and the revenue earned from the pipeline are shared by the three parties based on their ownership percentage. All major operating and financing decisions related to the yacht business must be agreed to by the three companies. The cost of purchasing the yacht was P56,000,000. The yacht has an estimated 20-year useful life with no residual value. The management fee for operating the yacht business for 2019 was P11,200,000. Revenue earned from the yacht business in 2019 was P18,480,000. AA invested P16,800,000 for a 30% interest.

Q12. Compute the share of Harith in the revenue of the joint operation for 2019?

Q13. Compute the share of Harith in the expenses of the joint operation for 2019?

Q14. Compute the share of AA in the gross profit/net income of the joint operation for 2019?

Q15. Give at least 3 examples of a business organization that have a home office and a branch. Provide the location of the home office and its branches.