2 (Two Sole Proprietors Form a Partnership; Books of one of the SoleProprietors to be used by the Partnership)On October 1, 2014, April and Arias decided to pool their assets and form a partnership.The firm is to take over business assets and assume business liabilities; equities are to-bebased on net assets transferred after the following adjustments:Arias' inventory is to be valued at P350,000.a.An allowance for uncollectible accounts of P9,000 and P7,500, respectively shouldbe set up.b.Accrued expenses of P21,000 are to be recognized on April's books.c.d.Arias is to contribute sufficient cash to give him a 60% interest in the new firm.Statements of financial position for April and Arias on October 1 before adjustments arepresented below.AprilP 187,500450,000400,000250,000( 112,500)P 1,175,000AriasP 112,500375,000300,000300,000( 37,500)P 1,050,000CashAccounts ReceivableMerchandise InventoryEquipmentAccumulated DepreciationTotal AssetsP 250,000Accounts PayableCapitalTotal Liabilities and Capital345,000830,000P 1,175,000800,000P 1,050,000Instructions:Give the entries to adjust and close the books of April.1.Give the entries required on the books of Arias upon the formation of thepartnership.2.3.Prepare a statement of financial position for the new partnership of April and Arias.

1). Entries to adjust and close the books of Accounts of April Date Account title Debit ($)…

2 (Two Sole Proprietors Form a Partnership; Books of one of the Sole Proprietors to be used by the Partnership) On October 1, 2014, April and Arias decided to pool their assets and form a partnership. The firm is to take over business assets and assume business liabilities; equities are to-be based on net assets transferred after the following adjustments: a. Arias' inventory is to be valued at P350,000. An allowance for uncollectible accounts of P9,000 and P7,500, respectively should be set up. b. Accrued expenses of P21,000 are to be recognized on April's books. c. d. Arias is to contribute sufficient cash to give him a 60% interest in the new firm.

2 (Two Sole Proprietors Form a Partnership; Books of one of the Sole Proprietors to be used by the Partnership) On October 1, 2014, April and Arias decided to pool their assets and form a partnership. The firm is to take over business assets and assume business liabilities; equities are to-be based on net assets transferred after the following adjustments: a. Arias' inventory is to be valued at P350,000. An allowance for uncollectible accounts of P9,000 and P7,500, respectively should be set up. b. Accrued expenses of P21,000 are to be recognized on April's books. c. d. Arias is to contribute sufficient cash to give him a 60% interest in the new firm.

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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