On May 1, 2022, Carlo has been in a trading business for five years as a sole proprietor. He needed additional capital to fund business expansion so he decided to invite Jamie by investing cash for a one-third interest in the new partnership, CABLES Trading. CABLES Trading would assume the liabilities of Carlo's business. Jamie accepted the invitation and both agreed to revalue assets of Carlo's business as itemized: Accounts Receivable P50,000; Merchandise Inventory P28,000; Office Equipment P22,000; and Land P279,000. Account balances in the books of Carlo were as follows: Account Titles Debit Credit Cash Accounts Receivable Allowance for Doubtful Accounts Merchandise 25,000 Inventory Office Equipment 33,000 Accumulated 15,000 Depreciation Land 260,000 Accounts Payable 194,000 Carlo, Capital 300,000 How much is the capital of CABLES Trading upon formation? P135,000 60,000 P 4,000

On May 1, 2022, Carlo has been in a trading business for five years as a sole proprietor. He needed additional capital to fund business expansion so he decided to invite Jamie by investing cash for a one-third interest in the new partnership, CABLES Trading. CABLES Trading would assume the liabilities of Carlo's business. Jamie accepted the invitation and both agreed to revalue assets of Carlo's business as itemized: Accounts Receivable P50,000; Merchandise Inventory P28,000; Office Equipment P22,000; and Land P279,000. Account balances in the books of Carlo were as follows: Account Titles Debit Credit Cash Accounts Receivable Allowance for Doubtful Accounts Merchandise 25,000 Inventory Office Equipment 33,000 Accumulated 15,000 Depreciation Land 260,000 Accounts Payable 194,000 Carlo, Capital 300,000 How much is the capital of CABLES Trading upon formation? P135,000 60,000 P 4,000

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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1. Ben and Bob are partners in a business selling sports wear and equipment which they organized in 2015. Profits are shared in the ratio of 1:1, respectively, Their capital balances as of December 31, 2017 were P240,000 and P260,000, respectively. Drawing accounts are always closed yearly to the capital accounts. They agreed to admit Ted upon payment of P150,000 for a 50% interest from Bench on July 1, 2018. Before admission they agreed to update their capital accounts for the following: (see attached image for the given. please answer it based on your knowledge. thank you so much) NOTE: someone already answer letter a to c so please answer letter d. thank you once again! Direction: Prepare a table revising partners' equity for revalualion and equity transfer. d. Determine the revised profit and loss ratio of the partners, assuming there was no agreement made after the purchase was made.
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Holden admits Jane for partnership interest in his business. The balance sheet accounts of Holden on December 31, 2019 prior to the admission of Jane are as follows: Cash ? Accounts receivable 100,000 Inventory 150,000 Accounts payable 50,000 Holden, Capital ? It is agreed that for purposes of establishing Holden’s interest, the following adjustments should be made: An allowance for doubtful accounts of 5% of accounts receivable is to be established The inventory is to be valued at P160,000 Prepaid expense of P5,000 and accrued expense of P4,000 are to be recognized Jane is to invest P115,000 to give her 1/3 interest in the firm. Total assets of the partnership after the formation is? P399,000 P345,000 P395,000 P339,000