Chapter 1-Accounting for Partnership Formation & Operation On March 1, of the current year, PP and QQ decide to combine their businesses and form a partnership. Their balance sheets on March 1, before adjustments, PP MULTIPLE CHOICE (PROBLEMS) QQ 3,750.00 showed the following: P Cash Accounts Receivable Inventories Furniture and Fixtures (net) Office Equipment (net) Prepaid Expenses Total Accounts Payable Capital Total 9,000.00 18,500.00 30,000.00 30,000.00 11,500.00 6,375.00 105,375.00 45,750.00 59,625.00 105,375.00 13,500.00 19,500.00 9,000.00 2,750.00 3,000.00 51,500.00 18,000.00 33,500.00 51,500.00 P. P. P. P They agreed to have the following items recorded in their books: a. Provide 2% allowance for doubtful accounts. b. PP's furniture and fixtures should be P31,000, while QQ's office equipment is under-depreciated by P250. c. Rent expense incurred previously by PP was not yet recorded amounting to P1,000, while salary expense incurred by QQ was not also recorded amounting to P800. d. The fair market value of inventory amounted to: for PP P29,500 and for QQ P21,000 1. Compute for the net (debit) credit adjustment for PP and QQ: a. PP: P2,870; QQ P2,820 b. PP: (P870); QQ: P180 c. PP: (P2,870); (P2,820) d. PP: 870; QQ:(P180)
Chapter 1-Accounting for Partnership Formation & Operation On March 1, of the current year, PP and QQ decide to combine their businesses and form a partnership. Their balance sheets on March 1, before adjustments, PP MULTIPLE CHOICE (PROBLEMS) QQ 3,750.00 showed the following: P Cash Accounts Receivable Inventories Furniture and Fixtures (net) Office Equipment (net) Prepaid Expenses Total Accounts Payable Capital Total 9,000.00 18,500.00 30,000.00 30,000.00 11,500.00 6,375.00 105,375.00 45,750.00 59,625.00 105,375.00 13,500.00 19,500.00 9,000.00 2,750.00 3,000.00 51,500.00 18,000.00 33,500.00 51,500.00 P. P. P. P They agreed to have the following items recorded in their books: a. Provide 2% allowance for doubtful accounts. b. PP's furniture and fixtures should be P31,000, while QQ's office equipment is under-depreciated by P250. c. Rent expense incurred previously by PP was not yet recorded amounting to P1,000, while salary expense incurred by QQ was not also recorded amounting to P800. d. The fair market value of inventory amounted to: for PP P29,500 and for QQ P21,000 1. Compute for the net (debit) credit adjustment for PP and QQ: a. PP: P2,870; QQ P2,820 b. PP: (P870); QQ: P180 c. PP: (P2,870); (P2,820) d. PP: 870; QQ:(P180)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Chapter 1-Accountring for Partnership Formation & Operation
On March 1, of the current year, PP and QQ decide to combine their businesses
and form a partnership. Their balance sheets on March 1, before adjustments.
MULTIPLE CHOICE (PROBLEMS)
QQ
PP
9,000.00
18,500.00
30,000.00
30,000.00
11,500.00
6,375.00
105,375.00
45,750.00
59,625.00
105,375.00
3,750.00
13,500.00
19,500.00
9,000.00
2,750.00
3,000.00
51,500.00
18,000.00
33,500.00
51,500.00
showed the following:
P
Cash
Accounts Receivable
Inventories
Furniture and Fixtures (net)
Office Equipment (net)
Prepaid Expenses
Total
P.
Accounts Payable
Capital
Total
P
They agreed to have the following items recorded in their books:
a. Provide 2% allowance for doubtful accounts.
b. PP's furniture and fixtures should be P31,000, while QQ's office
equipment is under-depreciated by P250.
c. Rent expense incurred previously by PP was not yet recorded amounting
to P1,000, while salary expense incurred by QQ was not also recorded
amounting to P800.
d. The fair market value of inventory amounted to: for PP P29,500 and for
QQ P21,000
1. Compute for the net (debit) credit adjustment for PP and QQ:
a. PP: P2,870; QO: P2,820
b. PP: (P870); QQ: P180
c. PP: (P2,870); (P2,820)
d. PP: 870; QQ:(P180)
2. How much is the total liabilities after the formation?
a.
P61,950
b.
63,950
C. P63,750
d. P65,550
3. How much is the total assets after the formation?
a.
P157,985
b.
156,875
c. P160,765
d. P152,985
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