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# CHAPTER 2 - 20 Chapter 2 CHAPTER 2 MULTIPLE CHOICE ANSWERS...

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20 Chapter 2 CHAPTER 2 MULTIPLE CHOICE ANSWERS AND SOLUTIONS 2-1: d Jordan Pippen Annual salary P120,000 P80,000 P200,000 Balance, equally ( 10,000 ) ( 10,000 ) ( 20,000 ) Total P110,000 P 70,000 P180,000 2-2: a JJ KK LL Bonus (.20 X P90,000) P18,000 P 18,000 Interest JJ (.15 X P100,000) P15,000 –) KK (.15 X P200,000) P 30,000 –) LL (.15 X P300,000) P45,000) 90,000 Balance, equally ( 6,000 ) ( 6,000 ) ( 6,000 ) ( 18,000 ) Total profit share P27,000 P 24,000 P39,000 P 90,000 2-3: a 2-4: a Allan Michael Interest Allan - .10 X (P40,000 + 60,000 /2) P 5,000 ) Michael - .10 X (P60,000 + 70,000/2) P 6,500) P 11,500 Balance, equally _14,000 _14,000 __28,000 Total P 19,000 P20,500 ,000 2-5: a Fred Greg Henry Interest (.10 of average capital) P12,000 P 6,000 P 4,000 P 22,000 Salaries 30,000 20,000 50,000 Balance, equally ( 35,000 ) ( 35,000 ) ( 35,000 ) (105,000)

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Total P 7,000 ( P29,000 ) (P11,000 ) 3,000) 2-6: b Average Capital Capital Months Peso Date Balance Unchanged Months January 1 140,000 6 P 840,000 July 1 180,000 1 180,000 August 1 165,000 5 __825,000 12 P1,845,000 Average capital - P1,845,000/12 = P153,750 Interest (P153,750 X 10%) = P 15,375 Partnership Operations 21 2-7: c Capital Months Peso Date Balance Unchanged Months January 1 P16,000 3 P 48,000 April 1 17,600 2 35,200 June 1 19,200 3 57,600 September 1 15,200 4 __60,800 12 P201,600 Average Capital(P201,600/12) = P16,800 2-8: a Net profit before bonus P 24,000 Net profit after bonus (P24,000/120%) __20,000 Bonus to RJ 4,000 Balance (P24,000-P4,000)X3/5 __12,000 Total profit share P 16,000 2-9: a LT AM Total Interest P3,200 P 3,600 P 6,800 Salaries 15,000 7,500 22,500 Balance, 3:2 (11,580) ( 7,720) ( 19,300) Total P 6,620 P 3,380 P 10,000 2-10: b Net income after salary, interest and bonus P467,500 Add back: Salary (P10,000 X 12) P120,000 Interest (P250,000 X .05) __12,500 _132,500 Net income after bonus (80%) P600,000 Net income before bonus (P600,000/80%) _750,000
Paul's bonus P150,000 2-11: b CC DD EE Total Salary P 14,000 000 Balance P14,000 P 8,400 5,600 28,000 Additional profit to DD ( 1,500 ) __2,100 ( 600 ) ______– Total P12,500 P10,500 P 19,000 ,000 Net income Fees Earned P90,000 Expenses _48,000 Net Income P42,000 22 Chapter 2 2-12: c LL MM NN Total Interest P 2,000 P 1,250 P 750 000 Annual Salary 8,500 8,500 Additional profit to give LL, P20,000 9,500 5,700 3,800 19,000* Additional profit to give MM, P14,000 _____– __7,050 _____– __7,050 Total P20,000 P14,000 P 4,550 550 *(P9,500/50%) = P19,000 2-13: a RR SS TT Total Excess (Deficiency) RR (P80,000 - P95,000) P15,000 –) SS (P50,000 - P40,000) (P10,000) –) P 5,000 Balance 4:3:1 _47,500 _35,625 _11,875 __95,000 Total P62,500 P25,625 P11,875 P100,000 Net Income (200,000 - 100,000) = P100,000

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2-14: b AA BB CC Total AA - 100,000 X 10% P 10,000 ) 150,000 X 20% 30,000 ) P 40,000 Remainder, 210,000 BB (60,000 X .05) P 3,000 ) CC (60,000 X .05) P 3,000 6,000 Balance, equally __68,000 _68,000 _68,000 _204,000 Total P108,000 P71,000 P71,000 P250,000 2-15: a AJ BJ CJ Total Bonus to CJ Net profit before bonus P44,000 Net profit after bonus (P44,000/110%)P40,000 P4,000 P4,000 Interest to BJ P1,000 1,000 Salaries P 10,000 12,000 22,000 Balance, 4:4:2 __6,800 _6,800 __3,400 _17,000 Total P 16,800 P7,800 P19,400 P44,000 2-16: c Total profit share of Pedro P200,000 Less: Salary to Pedro P 50,000 Interest __20,000 __70,000 Share in the balance (40%) P130,000 Net profit after salary and interest (130,000/40%) P325,000 Add: Total Salaries P150,000 Total Interest __70,000 _220,000 Total Partnership Income P545,000 Partnership Operations 23 2-17: c Net income before extraordinary gain and bonus (69,600-12,000) P 57,600 Net income after bonus (57,600/120%) _48,000 Bonus to RR P 9,600 Distribution of Net Income: JJ RR Total Bonus P 9,600 P 9,600 Balance, equally P 24,000 24,000 48,000 Net profit before extraordinary gain P 24,000 P 33,600 P 57,600
Extraordinary gain __4,800 __7,200 _12,000 Total P 28,800 P 40,800 P 69,600 2-18: a Mel Jay Total Interest P 20,000 P 12,000 P 32,000 Annual Salary 36,000 36,000 Remainder 60:40 __60,000 _40,000 _100,000 Total P116,000 P 52,000 P168,000 2-19: a DV JE FR Total Interest on excess (Deficiency) P 15,000 P 3,750 (P 7,500) P 11,250 Remainder 5:3:2 ( 36,875 ) ( 22,125 ) ( 14,750 ) ( 73,750) Total (P 21,875 ) (P 18,375 ) (P 22,250 ) 2,500) 2-20: c Correction of 1998 profit: Net income per books P 19,500 Understatement of depreciation ( 2,100) Overstatement of inventory, December 31 ( 11,400 ) Adjusted net income P 6,000 Pete Rico Total

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CHAPTER 2 - 20 Chapter 2 CHAPTER 2 MULTIPLE CHOICE ANSWERS...

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