A sole proprietor and an Individual with No business Form a Partnership On Apr. 8, 2020, Tolentino who has her own retail business and Tan, decided to form a partnership wherein they will divide profits in the ratio of 40:60, respectively. The statement of fin ancial position of Tolentino is as follows: Tolentino Marketing Statement of Financial Position April 8, 2020 Assets Cash Accounts Receivable P 160,000 16,000 P 4,000 Less: Allowance for Uncollectible Accounts 144,000 Inventory Equipment Less: Accumulated Depreciation Total A ssets 200,000 P 50,000 10,000 40,000 P388,000 Liabilities and Capital Accounts Payable Tolentino, Capital Total Liabilities and Capital P 36,000 352,000 P388 000 Conditions agreed upon before the formation of the partnership: a. The accoun ts receivable of Tolen tino is estimated to be 70% realizable b. The accumulated depreciation of the equipment will be increased by P10,000 c. The accounts payable will be assumed by the partnership. d. The capital of the partnership is based on the adjusted capital balan ce of Tolentino. Tan is to contribute cash in order to make the partner's capital balan ces proportionate to the profit and loss ratio. Required: 1. Prepare the necessary journal entries in the books of Tolentino. 2. Prepare the opening journal entries in the books of the partnership.
A sole proprietor and an Individual with No business Form a Partnership On Apr. 8, 2020, Tolentino who has her own retail business and Tan, decided to form a partnership wherein they will divide profits in the ratio of 40:60, respectively. The statement of fin ancial position of Tolentino is as follows: Tolentino Marketing Statement of Financial Position April 8, 2020 Assets Cash Accounts Receivable P 160,000 16,000 P 4,000 Less: Allowance for Uncollectible Accounts 144,000 Inventory Equipment Less: Accumulated Depreciation Total A ssets 200,000 P 50,000 10,000 40,000 P388,000 Liabilities and Capital Accounts Payable Tolentino, Capital Total Liabilities and Capital P 36,000 352,000 P388 000 Conditions agreed upon before the formation of the partnership: a. The accoun ts receivable of Tolen tino is estimated to be 70% realizable b. The accumulated depreciation of the equipment will be increased by P10,000 c. The accounts payable will be assumed by the partnership. d. The capital of the partnership is based on the adjusted capital balan ce of Tolentino. Tan is to contribute cash in order to make the partner's capital balan ces proportionate to the profit and loss ratio. Required: 1. Prepare the necessary journal entries in the books of Tolentino. 2. Prepare the opening journal entries in the books of the partnership.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:A sole proprietor and an Individual with No business Form a Partnership
On Apr. 8, 2020, Tolen tino who has her own retail business and Tan, decided to
form a partnership wherein they will divide profits in the ratio of 40:60,
respectively. The statement of financial position of Tolentino is as follows:
Tolentino Marketing
Statement of Financial Position
April 8, 2020
A ssets
Cash
Accounts Receivable
Less: Allowance for Uncollectible Accounts
P 4,000
P 160,000
16,000
144,000
Inventory
Equipment
Less: Accumulated Depreciation
Total Assets
200,000
P 50,000
10,000
40,000
P388,000
Liabilities and Capital
Accounts Payable
Tolentino, Capital
Total Liabilities and Capital
P 36,000
352,000
P388,000
Conditions agreed upon before the formation of the partnership:
a. The accoun ts receivable of Tolentino is estimated to be 70% realizable
b. The accumulated depreciation of the equipment will be increased by P10,000
c. The accounts payable will be assumed by the partnership.
d. The capital of the partnership is based on the adjusted capital balan ce of
Tolen tino. Tan is to contribute cash in order to make the partner's capital balan ces
proportion ate to the profit and loss ratio.
Required:
1. Prepare the necessary journal entries in the books of Tolen tino.
2. Prepare the opening journal entries in the books of the partnership.
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