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FINANCIAL ACCOUNTING
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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PARTNERSHIP FORMATION FOR NUMBERS 1-4 DEAN, POGI and GUAPO decided to form DPG Partnership. It was agreed that DEAN will contribute an equipment with assessed value of P100,000 with historical cost of P800,000 and accumulated depreciation of P600,000. POGI will contribute land and building with book value of P1,200,000 and fair market value of P1,500,000. The land and building is subject to mortgage payable amounting to P300,000 to be assumed by the partnership. The partners agreed that POGI will have 60% capital interest in the partnership. They agreed that GUAPO will contribute sufficient cash to the partnership. A day after the partnership formation, the equipment was sold for P300,000. 1. What is the total agreed capitalization of the DPG Partnership? 2. What is the capital credit of DEAN in the DPG Partnership after the formation? 3. What is the capital credit of POGI in the DPG Partnership after the formation? 4. What is the cash to be contributed by GUAPO in the DPG Partnership?
Transcribed Image Text:PARTNERSHIP FORMATION FOR NUMBERS 1-4 DEAN, POGI and GUAPO decided to form DPG Partnership. It was agreed that DEAN will contribute an equipment with assessed value of P100,000 with historical cost of P800,000 and accumulated depreciation of P600,000. POGI will contribute land and building with book value of P1,200,000 and fair market value of P1,500,000. The land and building is subject to mortgage payable amounting to P300,000 to be assumed by the partnership. The partners agreed that POGI will have 60% capital interest in the partnership. They agreed that GUAPO will contribute sufficient cash to the partnership. A day after the partnership formation, the equipment was sold for P300,000. 1. What is the total agreed capitalization of the DPG Partnership? 2. What is the capital credit of DEAN in the DPG Partnership after the formation? 3. What is the capital credit of POGI in the DPG Partnership after the formation? 4. What is the cash to be contributed by GUAPO in the DPG Partnership?
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