Reference no: EM132723812

Questions -

I. R, S and T formed a joint venture. R is to act as manager and is designated to record the joint venture accounts in his books. As manager, R is allowed to a salary of P120,000; remaining profit or loss is to be divided equally. The following balances appear at the end of 2020 before adjustment for inventory and profits.

The venture is to terminate as of December 31, 2020. Unsold merchandize costing P105,000 are taken over by T. R made the settlement to S and T.

Requirements:

a. How much is the venture income? Explain the answer.

b. How much is the profit share of Re? Explain the answer.

c. How much is the final settlement would T Receive? Explain the answer.

II. So, Sa, and Se formed a joint venture. So has been designated as manager of the venture, of which he is receive a bonus of 15% of the profit after deduction of the bonus as an expense. The net profit after bonus has been agreed to be divided as follows: So, 25%; Sa, 40%; and Se, 35%.

After five months, the joint venture is terminated as of May 31, 2020. On this date, the trial balance kept by So contains the following balances:

The venture has still some undisposed merchandise which So agreed to purchase at its cost of P25,000. The bonus of So has not yet been taken up.

Requirements:

a. How much is the bonus to So? Explain the answer.

b. How much is the share of Sa in the venture profit? Explain the answer.

c. How much is the cash settlement received by Sa and Se? Explain the answer.

III. V, I and P form a Joint for the sale of merchandise. I and P are to contribute the merchandise, V is to act as the manager and is to be allowed a bonus of 25% of the profit after deduction of the bonus as expense. I and P are to be allowed 6% interest a year on their original investment. The balance of any profit on the venture is to be divided equally among the three parties.

On July 1, 2020, I and P contributed merchandise of P66,000 and P90,000 respectively. For the period between July 1 and October 1, V sold venture merchandise on account for P240,000, of this amount P229,500 was collected, allowed sales discounts of P4,050, and wrote off P6,450 as uncollectible. V paid joint venture expenses of P58,650 from the joint venture cash. On October 1, the venture was terminated and unsold merchandise was returned at the following value: to I, P15,000 and to P, P11,400. Cash settlement was completed by V on the same day.

Requirements:

a. How much is the net profit (loss) of the joint venture before the bonus to V? Explain the answer.

b. The bonus to V amounts to? Explain the answer.

c. How much is the cash settlement received by I and P? Explain the answer.

IV. Ma and Me in a joint venture contributed 150,000 cah in order to purchase canned goods which were sold by lots a closing-out sale. They agreed to divide their profits equally and each shall record his purchase, sales and expenses in his own books. After selling almost all the canned goods, they wind up their venture. The following data relate to the venture transactions:

Joint venture credit balances are as follows: Me - P120,000, Ma - P105,000

Expenses paid from joint venture cash were P15,000 by Me and P19,500 by Ma

Cost of unsold canned goods which Me and Ma agreed to assume were P4,500 and P7,000 respectively

Requirements:

a. How much is the total sales of the joint venture? Explain the answer.

b. How much is the share of Ma on the venture profit? Explain the answer.

c. How much is the final settlement due to Me including his investment? Explain the answer.

V. V and R formed a joint venture on January 1, 2020 to operate two stores to be managed by each participant. They agreed to contribute cash as follows: V - P300,000; R - P200,000. Profits and losses are to be divided in the capital ratio. All venture transactions are for cash. Cash receipts and disbursements of the business during the 4-month period handled through the participant's personal bank account are as follows:

On April 30, the remaining non-cash venture assets in the hands of the participants were sold for P600,000. The venture is terminated and settlement is made between V and R.

Requirements:

a. How much is the venture profit (loss) for the 4-month period after selling the remaining venture assets? Explain the answer.

b. Using the information, the P600,000 is divided between the participants as what amount? Explain the answer.