The statement of financial position of Irvin Company, a single proprietorship on December I,2019 is as follows: Irvin Company Statement of Financial Position December 1,2019 Assets P 360,00 Cash P 960,000 40.000 Accounts Receivable 920,000 Less:Allowance for Uncollectible accounts 320,000 Merchandise Inventory Property, plant and equipment Less:Accumulated Depreciation P 240,000 20.000 220.000 PI,820,000 Total Assets Liabilities and Capital Accounts payable Irvin Co, Capital Total Liabilities and Capital P 560,000 1.260.000 P 1,820,000 Irvin Co admits Jester Yu and the latter is to invest cash to give him a capital credit equal to 4 of Irvin Co's capital after giving effect to the adjustments of the items below: The merchandise inventory is to be valued at P 280,000 The accounts receivable is estimated to be 95% collectible. The property, plant and equipment is underdepreciated by P 40,000 The partnership will use Irvin Co's old set of books. REQUIRED: a.) Give the necessary entries to adjust the books of Irvin Co and to record the formation of the partnership. b.) Prepare a statement of financial position for Irvin. Co and Jester Yu on December I, 2019.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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The statement of financial position of Irvin Company, a single proprietorship on December I,2019 is as follows:
Irvin Company
Statement of Financial Position
December 1,2019
Assets
P 360,00
Cash
P 960,000
40.000
Accounts Receivable
920,000
Less:Allowance for Uncollectible accounts
320,000
Merchandise Inventory
Property, plant and equipment
Less:Accumulated Depreciation
P 240,000
20.000
220.000
PI,820,000
Total Assets
Liabilities and Capital
Accounts payable
Irvin Co, Capital
Total Liabilities and Capital
P 560,000
1.260.000
P 1,820,000
Transcribed Image Text:The statement of financial position of Irvin Company, a single proprietorship on December I,2019 is as follows: Irvin Company Statement of Financial Position December 1,2019 Assets P 360,00 Cash P 960,000 40.000 Accounts Receivable 920,000 Less:Allowance for Uncollectible accounts 320,000 Merchandise Inventory Property, plant and equipment Less:Accumulated Depreciation P 240,000 20.000 220.000 PI,820,000 Total Assets Liabilities and Capital Accounts payable Irvin Co, Capital Total Liabilities and Capital P 560,000 1.260.000 P 1,820,000
Irvin Co admits Jester Yu and the latter is to invest cash to give him a capital credit equal to 4 of Irvin Co's capital
after giving effect to the adjustments of the items below:
The merchandise inventory is to be valued at P 280,000
The accounts receivable is estimated to be 95% collectible.
The property, plant and equipment is underdepreciated by P 40,000
The partnership will use Irvin Co's old set of books.
REQUIRED:
a.) Give the necessary entries to adjust the books of Irvin Co and to record the formation of the partnership.
b.) Prepare a statement of financial position for Irvin. Co and Jester Yu on December I, 2019.
Transcribed Image Text:Irvin Co admits Jester Yu and the latter is to invest cash to give him a capital credit equal to 4 of Irvin Co's capital after giving effect to the adjustments of the items below: The merchandise inventory is to be valued at P 280,000 The accounts receivable is estimated to be 95% collectible. The property, plant and equipment is underdepreciated by P 40,000 The partnership will use Irvin Co's old set of books. REQUIRED: a.) Give the necessary entries to adjust the books of Irvin Co and to record the formation of the partnership. b.) Prepare a statement of financial position for Irvin. Co and Jester Yu on December I, 2019.
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Partnership is one of the form of business organisation, under which two or more than two persons join their hands, invest capital and run business and at the end, will share profits and losses in a decided ratio.

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