1. On January 1, 20x1, Mr. A and Ms. B formed a partnership. Mr. A contributed cash of P500,000 while Ms. B contributed a building with carrying amount of P400,000 and fair value of P800,000. The building has an unpaid mortgage of P200,000 which is not assumed by the partnership. Requirement: Provide the journal entry to record the contributions of the partners.

1. On January 1, 20x1, Mr. A and Ms. B formed a partnership. Mr. A contributed cash of P500,000 while Ms. B contributed a building with carrying amount of P400,000 and fair value of P800,000. The building has an unpaid mortgage of P200,000 which is not assumed by the partnership. Requirement: Provide the journal entry to record the contributions of the partners.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Ahmed contributes cash of $12, 000 and Fatima contributes Office equipment that cost $10,000but valued at $8,000, during the first-year partners earn a profit of $5, 000. Assume the partners agreed to share the profit and loss equally.1. Prepare a journal entry to form the partnership? 2. How much profit should each partner earned?
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The simple journal entries to record the partners’ contributions include a debit to mortgage payable for ₱40,000. a credit to loan payable for ₱80,000. a ₱60,000 credit to cash. a ₱60,000 debit to C’s capital account.
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