BE 4On Feburary 1, Tonto Company and Torta Company decide to merge their proprietorshipsinto a partnership called Forward Home Company. The balance sheet of Tonto Companyshows:CashP50,000Accounts Receivable15,0001Less: Allowance for doubtful accounts_ 1,500P13,500Equipment20,000Less: Accumulated depreciation_10,000P10,000The partners agree that the net realizable value of the receivables is P12,500 and that thefair market value of the equipment is P15,000.InstructionsPrepare the necessary journal entry to record Tonto's investment in the partnership.BE 5Table 1On January 1, 20X3, Roy Smith and Ruth Cruz formed the Ray and Ruth Partnership byinvesting the following assets and liabilities in the business:Roy'sRuth'sBook valueBook valueCashP12,000P18,500Equipment38,00053,500Accumulated depn.-equipment8,2009,900Buildings84,00095,000Accumulated depn.-buildings25,00035,000Land60,00066,000Accounts payable35,00035,000Note payable 17,00029,000An independent appraiser believes that Roy's equipment has a market value of P29,000and Ruth's equipment has a market value of P47,500. The appraiser indicates Roy'sbuilding has a current value of P90,000 and Ruth's building has a current value ofP110,000. The appraiser further indicates that Roy's land has a current value of P78,000and Ruth's land has a current value of P80,000. Roy and Ruth agree to share profits andlosses in a 60:40 ratio. During the first year of operations, the business had net income ofP74,000 and each partner withdrew P30,000 cash.a)Refer to Table 1. Prepare the journal entries to record the initial investments in thebusiness by Roy and Ruth.b) Refer to Table 1. Prepare a balance sheet dated January 1, 2019, after thecompletion of the initial journal entries.

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BE 4 On Feburary 1, Tonto Company and Torta Company decide to merge their proprietorships into a partnership called Forward Home Company. The balance sheet of Tonto Company shows: Cash P50,000 Accounts Receivable15,000 1 Less: Allowance for doubtful accounts 1,500P13,500 Equipment20,000 Less: Accumulated depreciation_10,000P10,000 The partners agree that the net realizable value of the receivables is P12,500 and that the fair market value of the equipment is P15,000. Instructions Prepare the necessary journal entry to record Tonto's investment in the partnership.

BE 4 On Feburary 1, Tonto Company and Torta Company decide to merge their proprietorships into a partnership called Forward Home Company. The balance sheet of Tonto Company shows: Cash P50,000 Accounts Receivable15,000 1 Less: Allowance for doubtful accounts 1,500P13,500 Equipment20,000 Less: Accumulated depreciation_10,000P10,000 The partners agree that the net realizable value of the receivables is P12,500 and that the fair market value of the equipment is P15,000. Instructions Prepare the necessary journal entry to record Tonto's investment in the partnership.

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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