CHAPTER-6 - Joint Venture 103 CHAPTER 6 SOLUTIONS TO...

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Joint Venture 103 CHAPTER 6 SOLUTIONS TO MULTIPLE CHOICES 6-1: a Assets per Jessica Company- balance sheet P3,550,000 Jessica’s proportionate interest in assets of JV (50%) 1,000,000 Total assets of Jessica P4550,000 6-2: a Total liabilities only of Jenny Co. 6-3: b 6-4: b Investment of Heart P80,000 Profit share: Sales 150,800 Cost of sales (150,800 ÷ 125%) 120,640 Gross profit 30,160 Expenses 10,000 Net Profit 20,160 Profit/loss ratio x 40% 8,064 Balance of investment in JV P88,064 6-5: a Cash P190,000 Merchandise inventory 29,360 Accounts receivable 150,800 Total assets 370,160 Sweet Co’s, proportionate interest x 60% Sweet Company’s share in total asset P222,096 6-6: a Sales 7,200 Cost of sales Purchases P10,000 Merchandise inventory, end (50% of P10,000) __5,000 _5,000 Gross profit 2,200 Expenses ___500 Net profit P 1,700
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104 Chapter 6 6-7: b Original investment (cash) P10,000 Profit share (P1,700 / 2) ___850 Balance of Investment account P10,850 6-8: a Joint venture account before profit distribution (credit balance) P 9,000 Unsold merchandise __2,500 Joint venture profit before fee to Salas P11,500 Joint venture profit after fee to Salas (P11,500 / 115%) P10,000 6-9: b Fee of Salas (P10,000 x 15%) P 1,500 Profit share of Salas (P10,000 x 25%) _2,500 Total P 4,000 6-10: b Salas Salve Balance before profit distribution P 500 (dr) P 2,000 (cr) Profit share:Sabas (P10,000 x 40%) 4,000 Salve (P10,000 x 35%) ______ _3,500 Balance P 3,500 (cr) P 5,500 (cr) 6-11: d Joint venture account balance before profit distribution (debit) P 6,000 Joint venture profit (P4,500 x 3) _13,500 Cost of unsold merchandise (inventory) taken by Dante P19,500 6-12: b Edwin Capital: Debits: Balance before profit distribution P14,000 Credits: Profit share __4,500 Due from Edwin (debit balance) P 9,500
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Joint Venture 105 Settlement to Ferdie (Balance of capital account) Debits: P –0– Credits:Balance before profit distribution P16,000 Profit share __4,500 _20,500 Due to Ferdie (credit balance) P20,500 Settlement to Dante (balance of JV Cash account) Debits: Balance before cash settlement P30,000 Due from Edwin __9,500 P39,500 Credits:Due to Ferdie _20,500 Balance P19,000 6-13: a JV account balance before profit distribution (cr) P 4,600 Unsold merchandise (required dr balance after profit distribution) __2,000 Joint venture profit before fee to Jerry P 6,600 Joint venture profit after fee (P6,600 / 110%) __6,000 Fee to Jerry P 600 6-14: d Harry Capital Isaac Capital Balances before profit distribution (P 200) P 1,800 Profit distribution: Harry P6,000 x 50%) 3,000 Isaac (P6,000 x 20%) 1,200 Cash settlements P 2,800 P 3,000 6-15: b Sales P14,000 Cost of sales: Merchandise inventory, beg (contributions) P14,000 Freight 300 Purchases __4,000 Goods available for sale P18,300 Merchandise inventory, end (P8,300/2) __4,150 14,150 Gross profit (loss) (150) Expenses (P400 + P200) __600 Net profit (loss) P( 750 ) 6-16: c Contributions to the Joint Venture (P5,000 + P8,000) P13,000 Loss share (P750 x 50%) ( 375) Unsold merchandise taken (withdrawal) ( 4,150 ) Final settlement to jack P 8,475
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106 Chapter 6 SOLUTIONS TO PROBLEMS Problem 6 – 1 Books of Blanco (Manager) Books of Ablan JV Cash 100,000 Investment in JV 90,000 Joint Venture 90,000 Merchandise inventory 90,000 Cash 100,000
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This note was uploaded on 08/26/2010 for the course DOA 510 taught by Professor Li during the Spring '10 term at University of Santo Tomas.

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CHAPTER-6 - Joint Venture 103 CHAPTER 6 SOLUTIONS TO...

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