Exercise Partnership
Problem 1
The partnership agreement of Anita and Danu has the following provisions:
1. The partners are to earn 10 percent on the average capital.
2. Anita and Danu are to earn salaries of Rp25.000.000 and Rp15.000000, respectively.
3. Any remaining income or loss is to be divided between Angela and Dawn using a
70:30 ratio.
Anita’s average capital is Rp50.000.000 and Danu’s is Rp30.000.000.
Required
Prepare an income distribution schedule assuming the income of the partnership is
a) Rp80.000.000 and
b) Rp20.000.000. If no partnership agreement exists, what does the KUHPer prescribe
as the profit or loss distribution percentages?
Problem 2
Jefri and Krista are partners in J & K’s partnership, having capital balances of
Rp120.000.000 and Rp40.000.000, respectively, and share income in a ratio of 4:1. Bani
is to be admitted into the partnership with a 20 percent interest in the business.
Required
For each of the following independent situations, first record Bani’s admission into
the partnership:
a) Bani invests Rp50.000.000, and goodwill is to be recorded.
b) Bani invests Rp50.000.000. Total capital is to be Rp210.000.000; the partners use the
bonus method.
c) Bani purchases the 20 percent interest by directly paying Jefri Rp50.000.000. Bani
is assigned 20 percent interest in the partnership solely from Jefri’s capital account.
d) Bani invests Rp35.000.000. Total capital is to be Rp195.000.000; the partners use the
bonus method.
e) Bani invests Rp35.000.000, and goodwill is to be recorded.
f) Bani invests Rp35.000.000. During the valuation process made as part of admitting
the new partner, the partnership’s inventory is determined to be overvalued by
Rp20.000.000 because of obsolescence. J & K’s partnership uses the lower-of-costor-market value method for inventories.
Problem 3
The partnership of Joni and Oman began business on January 1, 20X7. Each partner
contributed the following assets (the noncash assets are stated at their fair values on
January 1, 20X7):
Joni
Oman
Cash
Rp60.000.000
Rp50.000.000
Inventories
80.000.000
0
Land
0
130.000.000
Equipment
100.000.000
0
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The land was subject to a Rp50.000.000 mortgage, which the partnership assumed on
January 1, 20X7. The equipment was subject to an installment note payable that had
an unpaid principal amount of Rp20.000.000 on January 1, 20X7. The partnership also
assumed this note payable. Joni and Oman agreed to share partnership income and
losses in the following manner:
Interests on beginning capital balances
Salaries
Remainder
Joni
3%
Rp12.000.000
60%
Oman
3%
Rp12.000.000
40%
During 20X7, the following events occurred:
1. Inventory was acquired at a cost of Rp30.000.000. At December 31, 20X7, the
partnership owed Rp6.000.000 to its suppliers.
2. Principal of Rp5.000.000 was paid on the mortgage. Interest expense incurred on
the mortgage was Rp2.000.000, all of which was paid by December 31, 20X7.
3. Principal of Rp3.500.000 was paid on the installment note. Interest expense
incurred on the installment note was Rp2.000.000, all of which was paid by
December 31, 20X7.
4. Sales on account amounted to Rp155.000.000. At December 31, 20X7, customers
owed the partnership Rp21.000.000.
5. Selling and general expenses, excluding depreciation, amounted to Rp34.000.000.
At December 31, 20X7, the partnership owed Rp6.200.000 of accrued expenses.
Depreciation expense was Rp6.000.000.
6. Each partner withdrew Rp200.000 each week in anticipation of partnership profits.
7. The partnership’s inventory at December 31, 20X7, was Rp20.000.000.
8. The partners allocated the net income for 20X7 and closed the accounts.
Additional Information
On January 1, 20X8, the partnership decided to admit Hilda to the partnership. On
that date, Hilda invested Rp99.800.000 of cash into the partnership for a 20 percent
capital interest. Total partnership capital after Hill was admitted totaled
Rp450.000.000.
Required
a. Prepare journal entries to record the formation of the partnership on January 1,
20X7, and to record the events that occurred during 20X7.
b. Prepare the income statement for the Join-Oman Partnership for the year ended
December 31, 20X7.
c. Prepare a balance sheet for the Joni-Oman Partnership at December 31, 20X7.
d. Prepare the journal entry for the admission of Hilda on January 1, 20X8.
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