PROBLEM: ZOE and ZIA PARTNERSHIP reported income for the year 2021 was P250,000.00 and the partners divide their profit 70:30 respectively. In January 2022, they changed the ratio to 50:50. During 2022, the following errors were discovered for the 2021 net income. 1. Depreciation was overstated by 30,000.00. 2. Prepaid rent for 20,000 was ommitted. 2. Accrued interest payable was ommitted worth 25,000.00 Required: 1. Compute the correct net income for 2021. 2. Compute the correct share of each partner in the net income for 2021. 3. Compute the difference of the share actually received and should have received by each partner in 2021. 4. Prepare the journal entry to record the adjustment of the partner's capital account on December 31, 2022.

PROBLEM: ZOE and ZIA PARTNERSHIP reported income for the year 2021 was P250,000.00 and the partners divide their profit 70:30 respectively. In January 2022, they changed the ratio to 50:50. During 2022, the following errors were discovered for the 2021 net income. 1. Depreciation was overstated by 30,000.00. 2. Prepaid rent for 20,000 was ommitted. 2. Accrued interest payable was ommitted worth 25,000.00 Required: 1. Compute the correct net income for 2021. 2. Compute the correct share of each partner in the net income for 2021. 3. Compute the difference of the share actually received and should have received by each partner in 2021. 4. Prepare the journal entry to record the adjustment of the partner's capital account on December 31, 2022.

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter22: Accounting For Changes And Errors.

Section: Chapter Questions

Problem 16E: Dudley Company failed to recognize the following accruals. It also recorded the prepaid expenses and...

See similar textbooks

Similar questions

On December 31, 2021, A&B Partnership has net income amounting to P350,450. Adjustments and correction are necessary for the following data to update the net income: 1. Insurance expense account has a debit balance of P4,550, P550 is still unexpired. 2. Service revenue earned but not yet billed as of December 31, 2021. P27,840 3. The Uneamed Service Revenue has a balance of P8.500, and P2,500 has already been earned 4. The correct but unrecorded Depreciation for the year amounted to P8.450. 5. The total payroll for the year in the amount of P5.600 was erroneously recorded in the books as P6,500. 6. The Allowance for Doubtful Accounts was taken up in the books at P2.350 instead of P3.250 After the adjustments and correction had been made how much is the adjusted and correct net income?
M, N and O are partners sharing profit and losses in the ratio 2:1:1. N died on 1st Jun 2020. The sales from 1st January 2020 to 1st Jun 2020 was OMR 90,000. Sales for 2019 OMR 120,000 Profit for 2019 was OMR 28,000. Calculate N's share of profit on the basis of turnover. a. None of the options b. OMR 20,997.00 c. OMR 5,249.25 d. OMR 26,246.25
A, B, C and D are partners sharing profit and losses in the rate of 4:3 :3:2. Their respective capitals on 31st March, 2021 were $3,000, $4,500, $6,000 and $4,500. After closing and finalizing the accounts it was found that interest on capital @ 6% per annum was omitted. Instead of altering the signed accounts it was decided to pass a single adjusting entry on 1st April, 2021 crediting or debiting the respective partners' accounts. Show the Journal Entry.
The partnership of Anthony and Davis had an unprotitable year and agreed to liquidate their business on December 31, 2019. The Statement of Financial Position as of December 31, 2019 is presented below: ASSETS P 1,000 Cash P 80,000 20,000 Accounts Receivable Less Allowance for Bad Debts Merchandise Inventory Prepaid Advertising Office Equipment Less Accumulated Depreciation TOTAL ASSETS 60,000 50,000 2,000 P 100,000 60,000 40.000 P 153,000 LIABILITIES AND EQUITY Accounts Payable Notes Payable (due October 31, 2020) Anthony, Capital Davis, Capital P 20,000 86,000 30,000 17,000 P 153,000 TOTAL LIABILITIES AND EQUITY The information concerning liquidation are as follows: 1. Accounts receivable's net carrying value plus 20% of the estimated bad debts were collected. 2. Merchandise inventory were realized for P 25,000 3. The contract for Prepaid Advertising has a cancellation value of P 800. 4. Office Equipment were realized equal to 60% of their book value. 5. Unrecorded Accounts Payable…
F. The partnership of Anthony and Davis had an unprofitable year and agreed to liquidate their business on December 31, 2019. The Statement of Financial Position as of December 31, 2019 is presented below: A S S E T S Cash P 1,000 Accounts Receivable P 80,000 Less Allowance for Bad Debts 20,000 60,000 Merchandise Inventory 50,000 Prepaid Advertising 2,000 Office Equipment P 100,000 Less Accumulated Depreciation 60,000 40.000 TOTAL ASSETS P 153,000 LIABILITIES AND EQUITY Accounts Payable P 20,000 Notes Payable (due October 31, 2020) 86,000 Anthony, Capital 30,000 Davis, Capital 17,000 TOTAL…
A sole proprietor and an Individual with No business Form a Partnership On Apr. 8, 2020, Tolen tino who has her own retail business and Tan, decided to form a partnership wherein they will divide profits in the ratio of 40:60, respectively. The statement of financial position of Tolentino is as follows: Tolentino Marketing Statement of Financial Position April 8, 2020 A ssets Cash Accounts Receivable Less: Allowance for Uncollectible Accounts P 4,000 P 160,000 16,000 144,000 Inventory Equipment Less: Accumulated Depreciation Total Assets 200,000 P 50,000 10,000 40,000 P388,000 Liabilities and Capital Accounts Payable Tolentino, Capital Total Liabilities and Capital P 36,000 352,000 P388,000 Conditions agreed upon before the formation of the partnership: a. The accoun ts receivable of Tolentino is estimated to be 70% realizable b. The accumulated depreciation of the equipment will be increased by P10,000 c. The accounts payable will be assumed by the partnership. d. The capital of the…
On March 1, 2020, EE and FF decided to combine their business and form a partnership. Their balance sheets onMarch 1 before adjustments showed the following: 1. Compute the net (debit)/credit adjustment for EE anf FF. EE FF EE FFA. 28,700 ; 28,200 C. (8,700) ; 1,800B. (28,700) ; (28,200) D. 8,700 ; (1,800) 2. Compute the total assets after the formation.A. 1,607,650 C. 1,579,850B. 1,570,850 D. 1,568,750 3. If the partners are to share profits and losses in the ratio of 6:4 and their capital is top reflect this relationship, what is the capital of FF after the formation?A. 400,000 C. 369,740B. 391,700 D. 391,700 4. If If the partners are to share profits and losses in the ratio of 6:4 and their capital is top reflect this relationship with EE’s capital to be used as a basis, what is the capital of FF after the formation?A. 400,000 C. 369,740B. 391,700 D. 391,700
Instructions: Do not use comma and peso sign (i.e. if your answer is P200,500, encode it as 200500) Problem: Partners Angela and Gabriel received a salary allowance of P30,000 and P70,000, respectively, and agreed to share the remainder of the profit equally. If the company earned P40,000 during the period, how will the profit be distributed: 1. Angela 2. Gabriel
Current Attempt in Progress After closing the revenue and expense accounts, the profit for the year ended December 31, 2024, of Sharon & Laura Partnership is $90,900. The partnership agreement specifies that profits and losses will be shared using the following formula. 1. Allocate salary allowances of $26,700 to Sharon and $37,500 to Laura. Remaining profit (loss) is to be shared on a ratio of 2:1. 2. At the beginning of the year, Sharon's capital account had a balance of $32,000 and Laura's capital account had a balance of $23,500. Sharon withdrew $1,068 cash per month while Laura withdrew $2,136 per month from the partnership. Prepare a schedule to show how the profit will be allocated to the two partners. (Round answers to O decimal places, e.g. 5,275.) SHARON & LAURA PARTNERSHIP Division of Profit Profit Salary allowance Sharon Sharon Laura LA Total
26. Kayo Na Company's income statement for the year ended December 31, 2019 shows pretax income of P2,000,000. The company's tax rate for 2019 is 30%. The following items are treated differently on the tax return and in the accounting records: Tax Return P140,000 560,000 Accounting Records Rent revenue Depreciation expense Premium on officers' life insurance P240,000 440,000 180,000 The records also show that the gross sales is P60M; cost of goods sold is P29M; sales returns and allowances, P450,000; & sales discounts, P550,000. What is the income tax payable for 2019? В. Р588,000 A. P534,000 С. Р600,000 D. P720,000
Carla Inc. incurred a net operating loss of $531,000 in 2025. The tax rate for all years is 30%. Prepare the journal entries to record the benefits of the loss carryforward. Carla expects to return to profitability in 2026. (List debit entry before credit entry. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.)
F. The partnership of Anthony and Davis had an unprofitable year and agreed to liquidate their business on December 31, 2019. The Statement of Financial Position as of December 31, 2019 is presented below: ASŞETS Cash P 1,000 Accounts Receivable P 80,000 Less Allowance for Bad Debts 20,000 60,000 Merchandise Inventory 50,000 Prepaid Advertising Office Equipment Less Accumulated Depreciation 2,000 P 100,000 60,000 40.000 TOTAL ASSETS P 153,000 LIABILITIES AND EQUITY Accounts Payable P 20,000 Notes Payable (due October 31, 2020) Anthony, Capital Davis, Capital 86,000 30,000 17,000 TOTAL LIABILITIES AND EQUITY P 153,000 The information concerning liquidation are as follows: 1. Accounts receivable's net carrying value plus 20% of the estimated bad debts were collected. 2. Merchandise inventory were realized for P 25,000 3. The contract for Prepaid Advertising has a cancellation value of P 800. 4. Office Equipment were realized equal to 60% of their book value. 5. Unrecorded Accounts…