PROBLEM 1

Cash 280,000
Land 1,350,000
Merchandise Inventory 510,000
Notes Payable 350,000
Labausa, Capital 1,790,000

Cash 1,790,000
Balhag, Capital 1,790,000

PROBLEM 2
Equipment 400,000
Accounts Receivable 360,000
Allowance for doubtful accounts (360,000x15%) 54,000
Sabio, Capital 706,000
 150,000-16,000 = 134,000 vs 140,000 Opening j
decrease allowance by 6,000 Cash
increase inventory to 460,000 Accounts Receivable
135,000 - 75,000 = 60,000 vs. 124,000 Inventory
increase the equipment to 124,000 Equipment

Unadjusted Espanol, Capital 640,000

Add: decrease in allowance 6,000
Add: increase in inventory 20,000
Add: increase in equipment 64,000
Adjusted Espanol, Capital 730,000

Allowance 6,000
E. Capital 6,000

Inventory 20,000
E. Capital 20,000

AccDep 64,000
E. Capital 64,000
 Opening journal entries
(36,000 + 730,000) 766,000
ccounts Receivable 150,000
460,000
124,000
Allowance for Doubtful Accounts 10,000
Accounts Payable 30,000
Espanol, Capital 730,000
Selisana, Capital 730,000

1,500,000 1,500,000
 Assets
Cash 766,000
Accounts Receivable 150,000
Less: Allowance for Dobutful Accounts 10,000 140,000
Inventory 460,000
Equipment 124,000
Total Assets 1,490,000

Liabilities and Owners' Equity

Accounts Payable 30,000
Espanol, Capital 730,000
Selisana, Capital 730,000
Total Liabilities and Owner's Equity 1,490,000
 Adjustments
a NRV: 1,986,000 vs 1,799,000 = 187,000 2,103,000 - 304,000 = 1,799,000

Mulles, Capital 187,000

Allowance for Uncollectible Accounts 187,000

Allowance for Uncollectible Accounts 304,000

Accounts Receivable 304,000

b Mulles, Capital 112,500

Inventory 112,500

c Mulles, Capital 29,250

Prepaid Rent 29,250

d BV: 292,500 vs. 300,000 = 7,500

Accumulated Depreciation 7,500

Mulles, Capital 7,500

Mulles, Capital 321,250

Allowance for Uncollectible Accounts 117,000
Accumulated Depreciation 7,500
Accounts Receivable 304,000
Inventory 112,500
Prepaid Rent 29,250

Mulles, Capital (2,714,250-321,250) 2,393,000

Closing Entries
Mulles, Capital 2,393,000
Accumulated Depreciation (97,500-7,500) 90,000
Accounts Payable 505,500
Notes Payable 330,000
Cash 229,500
Accounts Receivable (2,103,000-304,000) 1,799,000
Inventory (1,012,500 - 112,500) 900,000
Store Equipment 390,000
 Opening Entries
Cash 229,500
Accounts Receivable 1,799,000
Inventory 900,000
Store Equipment (390,000 - 90,000) 300,000
Accounts Payable 505,500
Notes Payable 330,000
Mulles, Capital 2,393,000

Cash 443,000
Land 500,000
Building 1,450,000
Lucena, Capital 2,393,000
000 = 1,799,000

Mulles, Capital 187,000

Allowance for Uncollectible Accounts 117,000
Accounts Receivable 304,000
 Adjustments
a Medina, Capital 105,200
Merchandise Inventory 105,200

Merchandise Inventory 7,200

Dalangin, Capital 7,200

b Land (108,000 - 40,000) 68,000

Medina, Capital 68,000

BV: 96,000 vs. 192,000 = 96,000 increase

Accumulated Depreciation - Building 32,000

Building 64,000
Medina, Capital 96,000

BV: 18,000 vs. 16,000 = 2,000 decrease

Medina, Capital 2,000

Accumulated Depreciation - Office Equipment 2,000

BV: 104,000 vs. 124,000 = 20,000 increase

Accumulated Depreciation - Repair Equipment 20,000

Medina, Capital 20,000

BV: 48,800 vs. 40,000 = 8,800 decrease

Dalangin, Capital 8,800

Accumulated Depreciation - Office Equipment 8,800

c Notes Payable 60,000

Medina, Capital 60,000

Medina, Capital (668,800 + 136,800) 805,600

Dalangin, Capital (432,800 - 1,600) 431,200

Closing Entries
Medina, Capital 805,600
Allowance for Uncollectible Accounts 22,400
Accumulated Depreciation-Office Equipment 8,000
Accumulated Depreciation-Repair Equipment 48,000
Accounts Payable 170,000
Notes Payable 60,000
Mortgage Payable 200,000
Cash 42,000
Accounts Receivable 389,200
Merchandise Inventory 356,400
Office Supplies 30,400
Land 108,000
Building 192,000
Office Equipment 24,000
Repair Equipment 172,000

Dalangin, Capital 431,200

Allowance for Uncollectible Accounts 14,400
Accumulated Depreciation-Office Equipment 22,000
Accounts Payable 111,600
Cash 30,000
Accounts Receivable 169,200
Merchandise Inventory 308,000
Prepaid Rent 6,000
Office Supplies 4,000
Office Equipment 62,000

Opening Entries
Cash 72,000
Accounts Receivable 558,400
Merchandise Inventory 664,400
Office Supplies 34,400
Prepaid Rent 6,000
Land 108,000
Building 192,000
Office Equipment 56,000
Repair Equipment 124,000
Allowance for Uncollectible Accounts 36,800
Accounts Payable 281,600
Notes Payable 60,000
Mortgage Payable 200,000
Medina, Capital 805,600
Dalangin, Capital 431,200

1,815,200 1,815,200
Land 68,000
Accumulated Depreciation - Building 32,000
Building 64,000
Accumulated Depreciation - Repair Equipment 20,000
Notes Payable 60,000
Merchandise Inventory 105,200
Accumulated Depreciation - Office Equipment 2,000
Medina, Capital 136,800

Merchandise Inventory 7,200

Dalangin, Capital 1,600
Accumulated Depreciation - Office Equipment 8,800
 Adjustments
a Geron, Capital 20,000
Accounts Receivable 20,000

Yumol, Capital 35,000

Accounts Receivable 35,000

b Geron, Capital 5,500

Inventory 5,500

Yumol, Capital 6,700

Inventory 6,700

c Geron, Capital 2,000

Other Assets 2,000

Yumol, Capital 3,600

Other Assets 3,600

Geron 614,476
Yumol 683,052

Closing Entries
Geron, Capital 614,476
Accounts Payable 178,940
Notes Payable 200,000
Cash 11,000
Accounts Receivable 214,536
Inventories 114,535
Land 603,000
Furnitures and Fixtures 50,345

Yumol, Capital 683,052

Accounts Payable 243,650
Notes Payable 345,000
Cash 22,354
Accounts Receivable 532,890
Inventories 253,402
Building 428,267
Furnitures and Fixtures 34,789
 Opening Entries
Cash 33,354
Accounts Receivable 747,426
Inventories 367,937
Land 603,000
Building 428,267
Furnitures and Fixtures 85,134
Accounts Payable 422,590
Notes Payable 545,000
Geron, Capital 614,476
Yumol, Capital 683,052

2,265,118 2,265,118
 PROBLEM 1
Original Profit
Investment
a Diaz 330,000 3/4 315,000
Manalo 110,000 1/4 105,000
440,000 420,000

b Diaz 330,000 3/4 315,000

Manalo 110,000 1/4 105,000

440,000 420,000

Interest 8% Balance 2:3 Profit

c Diaz 26,400 153,920 180,320
Manalo 8,800 230,880 239,680
35,200 384,800 420,000

Salary Balance Profit

d Diaz 50,000 150,000 200,000
Manalo 70,000 150,000 220,000
120,000 300,000 420,000

Salary Interest Balance Profit

e Diaz 50,000 26,400 132,400 208,800
Manalo 70,000 8,800 132,400 211,200
120,000 35,200 264,800 420,000
 PROBLEM 2
Average
ABLES Capital Profit
Jan 1 275,000 12/12 275,000 275,000 440,000

GALANG

Jan 1 200,000 8/12 133,333.33

Sept 1 275,000 4/12 91,666.67 225,000.00 360,000
500,000.00 800,000
 PROBLEM 3
Beginning
Capital Profit Loss
Abad 300,000 0.30 81,000 (72,000)
Aglugub 250,000 0.25 67,500 (60,000)
Onate 450,000 0.45 121,500 (108,000)
1,000,000 270,000 (240,000)
 PROBLEM 4
First 6 mos to Balance
June 30, 2021 Salary 60:40 Profit
Baral 15,000 96,000 111,000
Malaluan - 64,000 64,000
15,000 160,000 175,000

6 mos to
December 31, Balance
2021 Salary 40:40:20 Profit
Baral 25,000 60,000 85,000
Malaluan - 60,000 60,000
Castro - 30,000 30,000
25,000 150,000 175,000

Total
Baral 196,000
Malaluan 124,000
Castro 30,000
350,000
 PROBLEM 5
Profit
1 a Calamba 750,000
Brillantes 750,000
1,500,000
Original
Investment Profit
b Calamba 200,000 2/5 600,000
Brillantes 300,000 3/5 900,000
500,000 1,500,000

Time
Full = 100% Devoted Profit
PT = 50% c Calamba 100 2/3 1,000,000
Brillantes 50 1/3 500,000
150 1,500,000

Interest Balance 3:2 Profit

d Calamba 20,000 870,000 890,000
Brillantes 30,000 580,000 610,000
50,000 1,450,000 1,500,000

Interest Salary Balance

e Calamba 20,000 340,000 470,000
Brillantes 30,000 170,000 470,000
50,000 510,000 940,000

Interest Salary Bonus

f Calamba 20,000 340,000 198,000
Brillantes 30,000 170,000 -
50,000 510,000 198,000

Bonus 20% (Profit - Salaries)

Bonus 20% (1,500,000 - 510,000)
Bonus 20% (990,000)
Bonus 198,000
 Profit
330,000
330,000
660,000

Profit
264,000
396,000
660,000

Profit
440,000
220,000
660,000

Interest Balance 3:2 Profit

20,000 366,000 386,000
30,000 244,000 274,000
50,000 610,000 660,000

Profit Interest Salary Balance Profit

830,000 20,000 340,000 50,000 410,000
670,000 30,000 170,000 50,000 250,000
1,500,000 50,000 510,000 100,000 660,000

Balance Profit Interest Salary Bonus Balance Profit

371,000 929,000 20,000 340,000 30,000 35,000 425,000
371,000 571,000 30,000 170,000 - 35,000 235,000
742,000 1,500,000 50,000 510,000 30,000 70,000 660,000

Bonus 20%(Profit - Salaries)

Bonus 20%(660,000 - 510,000)
Bonus 20% (150,000)
Bonus 30,000
 Original Profit
Investment
a Tria 450,000 9/16 281,250
Resulta 350,000 7/16 218,750
800,000 500,000

b Interest 10% Balance Profit

Tria 45,000 210,000 255,000
Resulta 35,000 210,000 245,000
80,000 420,000 500,000

Salary Interest Balance Profit

c Tria 175,000 45,000 45,000 265,000
Resulta 155,000 35,000 45,000 235,000
330,000 80,000 90,000 500,000
 Profit

135,000
105,000
240,000

Interest 10% Balance Profit

45,000 80,000 125,000
35,000 80,000 115,000
80,000 160,000 240,000

Salary Interest Balance Profit

175,000 45,000 (85,000) 135,000
155,000 35,000 (85,000) 105,000
330,000 80,000 (170,000) 240,000
 Average
RIALUBIN Capital
Jan 1 80,000 3/12 20,000
April 1 100,000 3/12 25,000
July 1 90,000 6/12 45,000 90,000

RABENA
Jan 1 80,000 4/12 26,667
May 1 65,000 8/12 43,333 70,000

DELA CRUZ
Jan 1 90,000 8/12 60,000
Sept 1 60,000 4/12 20,000 80,000
240,000

1 Profit Ave. Cap.

RIALUBIN 18,000 90,000 3/8
RABENA 14,000 70,000 7/24
DELA CRUZ 16,000 80,000 1/3
Profit 48,000 240,000

Bonus Balance Profit

2 RIALUBIN 5,000 14,400 19,400
RABENA - 14,400 14,400
DELA CRUZ - 16,200 16,200
5,000 45,000 50,000

3 Interest Balance Loss

RIALUBIN 8,000 (20,000) (12,000)
RABENA 8,000 (20,000) (12,000)
DELA CRUZ 9,000 (20,000) (11,000)
25,000 (60,000) (35,000)
 Initial Capital Profit
1 Alisuag 300,000 300/1000 135,000
Go 500,000 500/1000 225,000
Palatino 200,000 200/1000 90,000
1,000,000 450,000

Interest 7% Balance Profit

2 Alisuag 21,000 190,000 211,000
Go 35,000 142,500 177,500
Palatino 14,000 47,500 61,500
70,000 380,000 450,000

3 Salary Interest 5% Balance Profit

Alisuag 50,000 15,000 140,000 205,000
Go 40,000 25,000 105,000 170,000
Palatino 30,000 10,000 35,000 75,000
120,000 50,000 280,000 450,000

4 Bonus Salary Interest 5% Balance Profit

Alisuag 33,333 30,000 15,000 75,556 153,889
Go - 45,000 25,000 75,556 145,556
Palatino - 65,000 10,000 75,556 150,556
33,333 140,000 50,000 226,667 450,000

Bonus 8% (Profit - B)
Bonus 8% (450,000 - B)
Bonus 36,000 - .08B
B + .08B 36,000
1.08B 36,000
Bonus 33,333
Requirement number 1
Profit Before Adjustment (2021) 1,450,000
Adjustments:
Less: Understated Beginning Inventory (80,000)
Add: Understated Ending Inventory 180,000
Less: Understated Depreciation Exp. (50,000)
Profit After Adjustment (2021) 1,500,000

Overstated Ending Inventory = Overstated Net Income

Understated Ending Inventory = Understated Net Income
Understated Expenses = Overstated Net Income
Overstated Beginning Inventory = Understated Net Income
Understated Beginning Inventroy = Overstated Net Income

Requirement 2
40:40:20
a a - on BI b - on EI
Gascon (28,000) 28,000 32,000
Pahilagao (28,000) 28,000 32,000
Nolasco (14,000) 14,000 16,000
(70,000) 70,000 80,000 150,000

2019 Profit 2020 Profit

Before Adj 850,000 1,100,000
Less: Over-EI (70,000)
After Adj. 780,000

Add: Over-BI 70,000

Add: Under-EI 80,000
After Adj. 1,250,000
Income Summary (correctio
Requirement 1

2021 Salary Bonus Balance Profit

Gascon 200,000 80,000 262,500 542,500
Pahilagao 200,000 80,000 262,500 542,500
Nolasco 150,000 40,000 225,000 415,000
550,000 200,000 750,000 1,500,000

Bonus percentages @(1,500,000 - 1,100,000)

Bonus percentages @ 400,000

Requirement 2
Before Adjustment
2019 Salary Bonus Balance Profit
Gascon 150,000 - 200,000 350,000
Pahilagao 150,000 - 200,000 350,000
Nolasco 50,000 - 100,000 150,000
350,000 - 500,000 850,000

Bonus percentages in excess of 900,000

Bonus No Bonus

After Adjustment
2019 Salary Bonus Balance Profit
Gascon 150,000 - 172,000 322,000
Pahilagao 150,000 - 172,000 322,000
Nolasco 50,000 - 86,000 136,000
350,000 - 430,000 780,000

Bonus percentages in excess of 900,000

Bonus No Bonus

2019 Corrections
Gascon (28,000)
Pahilagao (28,000)
Nolasco (14,000)
(70,000)
 Before Adjustment
2020 Salary Bonus Balance Profit
Gascon 150,000 40,000 268,000 458,000
Pahilagao 150,000 40,000 268,000 458,000
Nolasco 50,000 - 134,000 184,000
350,000 80,000 670,000 1,100,000

Bonus percentages @(1,100,000 - 900,000)

Bonus percentages @ 200,000

After Adjustment
2020 Salary Bonus Balance Profit
Gascon 150,000 70,000 304,000 524,000
Pahilagao 150,000 70,000 304,000 524,000
Nolasco 50,000 - 152,000 202,000
350,000 140,000 760,000 1,250,000

Bonus percentages @(1,250,000 - 900,000)

Bonus percentages @ 350,000

2020 Corrections 2019 Corrections

Gascon 66,000 Gascon (28,000)
Pahilagao 66,000 Pahilagao (28,000)
Nolasco 18,000 Nolasco (14,000)
150,000 (70,000)

2021 Net Effect

Gascon 38,000
Pahilagao 38,000
Nolasco 4,000
80,000

Income Summary (corrections on 2019 and 2020 MI) 80,000

Gascon, Capital 38,000
Pahilagao, Capital 38,000
Nolasco, Capital 4,000