Joint Venture CHAPTER 6 SOLUTIONS TO MULTIPLE CHOICES 6-1: a Assets per Jessica Company- balance sheet Jessicas proportionate

interest in assets of JV (50%) Total assets of Jessica a b b Investment of Heart Profit share: Sales Cost of sales (150,800 125%) Gross profit Expenses Net Profit Profit/loss ratio Balance of investment in JV a Cash Merchandise inventory Accounts receivable Total assets Sweet Cos, proportionate interest Sweet Companys share in total asset a Sales Cost of sales Purchases Merchandise inventory, end (50% of P10,000) Gross profit Expenses Net profit 6-7: b Original investment (cash) Profit share (P1,700 / 2) Balance of Investment account 6-8: a Joint venture account before profit distribution (credit balance) Unsold merchandise Joint venture profit before fee to Salas Joint venture profit after fee to Salas (P11,500 / 115%) 6-9: b Fee of Salas (P10,000 x 15%) Profit share of Salas (P10,000 x 25%) Total 6-10: b Salas Balance before profit distribution Profit share:Sabas (P10,000 x 40%) Salve (P10,000 x 35%) Balance P 500 (dr) 4,000 ______ P 3,500 (cr) Salve P 2,000 (cr) _3,500 P 5,500 (cr) P80,000 150,800 120,640 30,160 10,000 20,160 x 40% Total liabilities only of Jenny Co. P3,550,000 1,000,000 P4550,000

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6-2: 6-3: 6-4:

8,064 P88,064 P190,000 29,360 150,800 370,160 x 60% P222,096 7,200 P10,000 __5,000 _5,000 2,200 ___500 P 1,700

6-5:

6-6:

P10,000 ___850 P10,850 P 9,000 __2,500 P11,500 P10,000 P 1,500 _2,500 P 4,000

6-11:

d Joint venture account balance before profit distribution (debit) Joint venture profit (P4,500 x 3) Cost of unsold merchandise (inventory) taken by Dante P19,500

P 6,000 _13,500

6-12:

b Edwin Capital: Debits: Balance before profit distribution Credits: Profit share Due from Edwin (debit balance) Settlement to Ferdie (Balance of capital account) Debits: Credits: Balance before profit distribution Profit share Due to Ferdie (credit balance) Settlement to Dante (balance of JV Cash account) Debits: Balance before cash settlement Due from Edwin Credits: Due to Ferdie Balance P30,000 __9,500

P14,000 __4,500 P 9,500

P 0 P16,000 __4,500 _20,500 P20,500

P39,500 _20,500 P19,000 P 4,600 __2,000 P 6,600 __6,000 P 600

6-13:

a JV account balance before profit distribution (cr) Unsold merchandise (required dr balance after profit distribution) Joint venture profit before fee to Jerry Joint venture profit after fee (P6,600 / 110%) Fee to Jerry

6-14:

d Harry Capital Balances before profit distribution Profit distribution: Harry P6,000 x 50%) Isaac (P6,000 x 20%) Cash settlements (P 200) 3,000 1,200 P 2,800 P 3,000 P14,000 P14,000 300 __4,000 P18,300 __4,150 14,150 (150) __600 P( 750) Isaac Capital P 1,800

6-15:

b Sales Cost of sales: Merchandise inventory, beg (contributions) Freight Purchases Goods available for sale Merchandise inventory, end (P8,300/2) Gross profit (loss) Expenses (P400 + P200) Net profit (loss)

6-16:

c Contributions to the Joint Venture (P5,000 + P8,000) Loss share (P750 x 50%) Unsold merchandise taken (withdrawal) Final settlement to jack

P13,000 ( 375) ( 4,150) P 8,475