Advance Accounting 1
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
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
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
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