9. On October 1, A and B pooled their assets to form a Partnership, with the firm to take over the business assets and assume liabilities. Partners capitals are to be based on net assets transferred after the following adjustments: The partners agreed to the following adjustments: a. A's inventory is to be increased by P15,000, while B's inventory has a current fair market value of P100,000 and an agreed value of P110,000. B's unadjusted inventory amounted to P90,000. b. Machinery and equipment are over-depreciated by P5,000 and P8,000 for A and B, respectively. c. Furnitures and fixtures for partner A has a current fair market value of P60,000 and an agreed value P50,000. Furnitures and fixtures is carried at its cost amounting to P100,000 with accumulated depreciation of P45,000. d. Accrued rent income of P10,000 for A, and accrued salaries of P5,000 for B should be recognized on their respective books. The individual trial balances on October 1, before adjustments, follow: DESCRIPTION A B Assets P120,000 P130,000 Liabilities 50,000 60,000 Assume that the partners agreed to account for the formation using the bonus approach, determine the amount of bonus.

9. On October 1, A and B pooled their assets to form a Partnership, with the firm to take over the business assets and assume liabilities. Partners capitals are to be based on net assets transferred after the following adjustments: The partners agreed to the following adjustments: a. A's inventory is to be increased by P15,000, while B's inventory has a current fair market value of P100,000 and an agreed value of P110,000. B's unadjusted inventory amounted to P90,000. b. Machinery and equipment are over-depreciated by P5,000 and P8,000 for A and B, respectively. c. Furnitures and fixtures for partner A has a current fair market value of P60,000 and an agreed value P50,000. Furnitures and fixtures is carried at its cost amounting to P100,000 with accumulated depreciation of P45,000. d. Accrued rent income of P10,000 for A, and accrued salaries of P5,000 for B should be recognized on their respective books. The individual trial balances on October 1, before adjustments, follow: DESCRIPTION A B Assets P120,000 P130,000 Liabilities 50,000 60,000 Assume that the partners agreed to account for the formation using the bonus approach, determine the amount of bonus.

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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10. On October 1, A and B pooled their assets to form a Partnership, with the firm to take over the business assets and assume liabilities. Partners capitals are to be based on net assets transferred after the following adjustments. The partners agreed to the following adjustments: A’s inventory is to be increased by P15,000, while B’s inventory has a current fair market value of P100,000 and an agreed value of P110,000. B’s unadjusted inventory amounted to P90,000. Machinery and equipment are over-depreciated by P5,000 and P8,000 for A and B, respectively. Furnitures and fixtures for partner A has a current fair market value of P60,000 and an agreed value of P50,000. Furnitures and fixtures is carried at its cost amounting to P100,000 with accumulated depreciation of P45,000. Accrued rent income of P10,000 for A, and accrued salaries of P5,000 for B should be recognized on their respective books. The individual trial balances on October 1, before adjustments, follow: DESCRIPTION…
On October 1, A and B pooled their assets to form a Partnership, with the firm to take over the business assets and assume liabilities. Partners capitals are to be based on net assets transferred after the following adjustments. The partners agreed to the following adjustments: 1. A's inventory is to be increased by P15,000, while B's inventory has a current fair market value of P100,000 and an agreed value of P110,000. B's unadjusted inventory amounted to P90,000. 2. Machinery and equipment are over-depreciated by P5,000 and P8,000 for A and B, respectively. 3. Furnitures and fixtures for partner A has a current fair market value of P60,000 and an agreed value of P50,000. Furnitures and fixtures is carried at its cost amounting to P100,000 with accumulated depreciation of P45,000. 4. Accrued rent income of P10,000 for A, and accrued salaries of P5,000 for B should be recognized on their respective books. The individual trial balances on October 1, before adjustments, follow:…
On October 1, A and B pooled their assets to form a Partnership, with the firm to take over the business assets and assume liabilities. Partners capitals are to be based on net assets transferred after the following adjustments. The partners agreed to the following adjustments: 1. A's inventory is to be increased by P15,000, while B's inventory has a current fair market value of P100,000 and an agreed value of P110,000. B's unadjusted inventory amounted to P90,000. 2. Machinery and equipment are over-depreciated by P5,000 and P8,000 for A and B, respectively. 3. Furnitures and fixtures for partner A has a current fair market value of P60,000 and an agreed value of P50,000. Furnitures and fixtures is carried at its cost amounting to P100,000 with accumulated depreciation of P45,000. 4. Accrued rent income of P10,000 for A, and accrued salaries of P5,000 for B should be recognized on their respective books. The individual trial balances on October 1, before adjustments, follow:…
On October 1, A and B pooled their assets to form a Partnership, with the firm to take over the business assets and assume liabilities. Partners capitals are to be based on net assets transferred after the following adjustments. The partners agreed to the following adjustments: 1. A's inventory is to be increased by P15,000, while B's inventory has a current fair market value of P100,000 and an agreed value of P110,000. B's unadjusted inventory amounted to P90,000. 2. Machinery and equipment are over-depreciated by P5,000 and P8,000 for A and B, respectively. 3. Furnitures and fixtures for partner A has a current fair market value of P60,000 and an agreed value of P50,000. Furnitures and fixtures is carried at its cost amounting to P100,000 with accumulated depreciation of P45,000. 4. Accrued rent income of P10,000 for A, and accrued salaries of P5,000 for B should be recognized on their respective books. The individual trial balances on October 1, before adjustments, follow:…
11. On April 1, 2020, Abrenica and Banggayan pooled their assets to form a partnership, with the firm to take over their business assets and assume the liabilities. Partners capitals are to be based on net assets transferred after the following adjustments: a. Banggayan inventory is to be increased by P21,000; b. Allowance for doubtful accounts of P7,000 and P10,500 are to be set up in the books of Abrenica and Banggayan, respectively; Accounts payable of P28,000 is to be recognized on Abrenica's books. C. The individual trial balances on April 1, 2020, before adjustments follow: Abrenica Banggayan P931,000 Assets P525,000 Liabilities 35,000 241,500 Capital 490,000; 549,500 How much is the capital of Abrenica after the above adjustments to his books? a. P490,000 b. P455,000 C. P479,500 d. P462,000
On August 1, SS and UR pooled their assets to form a partnership, with the firm to take over their business assets and assume the liabilities. Partnership capitals are to be based on net assets transferred after the following adjustments: The inventory of UR is to be increased by P4,000; an allowance for doubtful accounts of P1,000 and P1,500 is to be set up in the books of SS and UR, respectively; and accounts payable is to be recognized in SS’s books. Profits and losses are allocated equally. The individual trial balances on August, before adjustments follow: SS URAssets P75,000 P113,000Liabilities 5,000 34,000 Required: Prepare the journal entries to record the adjustments in the books of SS and UR.
On August 1, AA and BB pooled their assets to form a partnership, with the firm to take over their business assets and assume the liabilities. Partner's capitals are to be based on net assets transferred after the following adjustments. Profit & loss are allocated equally. BB's inventory is to be increased by P4,000, an allowance for doubtful account of P1,000 and P1,500 are to be set up in books of AA and BB, respectively; and accounts payable of P4,000 is to be recognized in AA's books. The individual trial balances on August, before adjustments, follow: AA BB Assets Liabilities 75,000 113,000 5,000 34,500 What is the capital of AA and BB after the above adjustments? O A. AA (68,750); BB (77,250) O B. AA (75,000); BB (81,000) O C. AA (65,000); BB (76,000) O D. AA (65,000); BB (81,000)
On October 1, Ara and Ben pooled their assets to form a Partnership, with the firm to take over the business assets and assume liabilities. Partners capitals are to be based on net assets transferred after the following adjustments. The partners agreed to the following adjustments: Ara's inventory is to be increased by 15,000, while Ben's inventory has a current fair market value of 100,000 and an agreed value of 110,000. Ben's unadjusted inventory amounted to 90,000. Machinery and equipment are over-depreciated by 5,000 and 8,000 for Ara and Ben, respectively. Furnitures and fixtures for Ara has a current fair market value of 60,000 and an agreed value of 50,000. Furnitures and fixtures is carried at its cost amount to 100,000 with accumulated depreciation of 45,000. Accrued rent income of 10,000 for Ara and accrued salaries of 5,000 for Ben should be recognized on their respective books. The individual trial balances on October 1, before adjustments, follow: DESCRIPTION Ara Ben…
On August 1, Isada and Ureta pooled their assets to form a partnership , with the firm to take over their business assets and assume the liabilities. Partnership capitals are to be based on net assets transferred after the following adjustments. Profits and losses are allocated equally. The inventory of Ureta is to be increased by P4,000; an allowance for doubtful accounts of P1,000 and P1,500 are to be set up in the books of Isada and Ureta, respectively and accounts payable of P4,000 is to be recognized in Isadas’ book. The individual trial balances on August, before adjustment are as follows: Isada Ureta Assets 75,000 113,000 Liabilities 5,000 34,500 What is the capital balance of Isada and Ureta after the above adjustments?
On March 1, 2018, X and Y formed a partnership. The partners contributed the following: (see attached image) The partners agree on the following:a. P10,000 of the accounts receivable of X is to be written-off.b. An allowance for doubtful accounts of 15% is to be established on the remaining receivables of X and Y.c. The inventory of Y is to be valued at P140,000.d. The equipment of X is under depreciated by P20,000 and the equipment of Y has a fair value of P190,000.e. The note of X is dated December 1, 2017 and is subject to a 12% interest. Interest had not yet been accrued.f. The partners agree on a 2:1 profit and loss ratio.g. The partners agree to bring their capital balance proportionate to their profit and loss ratio.Requirement:1. If Y's Capital is to be used as basis, how much is the adjusted capital of X after the formation? 2. What is the total assets of the partnership immediately after the formation?3. If the goodwill method is to be used in determining the capital of each…
C1, C2 and C3 are partners sharing profits and losses in the ratio of 4:3:3, respectively. The condensed statement of financial position as of December 1, 2019 includes: cash, P140,000; other assets, P260,000; liabilities, P100,000; C1 capital, P120,000; C2 capital, P100,000; and C3 capital, P80,000. All the partners agree to admit C4 as 1/5 partner in the partnership without any asset revaluation nor bonus.What amount of investment should C4 contribute?
A and B entered into a partnership on April 1, 2020 by investing the following assets: A - Cash P30,000 and Office Equipment with an agreed value of P200,000. B-Accounts receivable P90,000 and Transportation Equipment of P160,000. The agreement between A and B provides that profits and losses are to be divided into 40% and 60% respectively, and that the partnership is to assume a liability on the Transportation Equipment of P60,000. The partnership further agreed that B is to receive a capital credit equal to his profit and loss ratio. How much cash is to be invested by B?