Exercise 3-2 Instructions:

Problem 3-1 (Division of Profit under Various Assumptions) The capital accounts of Bondoc and Barba at the end of the fiscal year 2014 are ; follows: Bondoc, Capital P210,000 January 1 Balance 90,000 May Investment October 1 Withdrawal P60,000 Barba, Capital P150,000 January 1 Balance April 1 Withdrawal P30,000 The partnership profit for the year ended December 31, 2014 is P300,000. Instructions: Give the journal entries to record the transfer of profit to the capital accounts under each of the following assumptions: (Show the procedure used in calculating the respective amounts as an explanation for each entry). 1. Profit is divided 60% to Bondoc and 40% to Barba. 2. Profit is divided in the ratio of capital balances at the beginning of the period. 3. Profit is divided in the ratio of average capital. 4. Interest at 8% is allowed on average capital and the balance of profit is divided equally. 5. Salaries of P60,000 and P48,000 are allowed to Bondoc and Barba, respectively, and the balance of profit is divided in the ratio of capital balances at the end of the period. 6. Bondoc is allowed a bonus of 33 1/3% of profit after bonus, and the balance of the profit is divided in the ratio of the average capital. Problem 3-2 (Division of Profit under Various Assumptions) Bernal and Burgos formed a partnership on January 1, 2014. The changes in their respective capital balances during the year ended December 31, 2014 are presented on the next page. During the year, the partnership earned a profit of P350,000