EXERCISE 6. Journal Entries - Capital share different from capital contribution.On June 1, 2022, Al and Ace formed a partnership. Al contributed cash of P600,000, inventories of P100,000, and furniture and fixtures of P120,000.On the other hand, Ace contributed cash of P520,000, building of P330,000, and land of P200,000. The building was mortgaged for a loan amountingto P500,000 of which 70% had already been paid. The remaining balance would be assumed by the partnership. The partners agreed to share profitsand losses equally.Prepare and upload journal entries related to partnership formation, assuming:1. Each partner would be credited for the full amount of net assets invested2. Each partner initially should have equal interest in partnership capital. To ensure this, it was agreed that partner with a lower capital balance had toinvest additional cash.

Partnership is the relation between two or more partners who have agreed to share profit/loss of the…

ERCISE 6. Journal Entries - Capital share different from capital contrib June 1, 2022, Al and Ace formed a partnership. Al contributed cash of the other hand, Ace contributed cash of P520,000, building of P330,0 500,000 of which 70% had already been paid. The remaining balance losses equally. pare and upload journal entries related to partnership formation, assur Each partner would be credited for the full amount of net assets inves Each partner initially should have equal interest in partnership capital. invest additional cash.

ERCISE 6. Journal Entries - Capital share different from capital contrib June 1, 2022, Al and Ace formed a partnership. Al contributed cash of the other hand, Ace contributed cash of P520,000, building of P330,0 500,000 of which 70% had already been paid. The remaining balance losses equally. pare and upload journal entries related to partnership formation, assur Each partner would be credited for the full amount of net assets inves Each partner initially should have equal interest in partnership capital. invest additional cash.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

Question 2 Brown, Blue, and Black are in partnership sharing profit and losses in the ratio 2:1:2. The balance sheet for the partnership as of April 15, 2019, was as follows: $ Non-current assets Land Buildings Equipment Current assets Inventory Accounts receivable Cash Total assets Capital account Brown Blue Black Non-current liabilities Mortgage on building Current liabilities Accounts payable Total liabilities 360,000 1,260,000 234,000 108,000 45,000 36,000 315,000 108,000 450,000 1,080,000 90,000 $ 1,854,000 Required: Prepare the following ledger accounts for the dissolution of the partnership: a) Realization account b) Bank account c) Partner's capital account 189,000 2,043,000 873,000 1,080,000 90,000 2,043,000 The partners agreed to dissolve the partnership on April 15, 2019 on the following conditions: Sold the inventory for $72,000, collected $48,000 on accounts receivable and wrote off the remaining accounts, sold equipment for $192,000 and building and land for $1,200,000,…
Admitting New Partner Who Contributes Assets After the tangible assets have been adjusted to current market prices, the capital accounts of Brad Paulson and Drew Webster have balances of $87,000 and $148,000, respectively. Austin Neel is to be admitted to the partnership, contributing $58,000 cash to the partnership, for which he is to receive an ownership equity of $75,000. All partners share equally in income. a. Journalize the entry to record the admission of Neel, who is to receive a bonus of $17,000. For a compound transaction, if an amount box does not require an entry, leave it blank. b. What are the capital balances of each partner after the admission of the new partner? Partner Brad Paulson Drew Webster Austin Neel Balance c. Why are tangible assets adjusted to current market prices prior to admitting a new partner? Tangible assets should be adjusted to current market prices so that the to being admitted. does not share in any gains or losses from changes in market prices
Provide solution
Problem-solving Admissionby Purchase of Interest or Investment of AssetsAngeles. Bondoc and Campos have equities in a partnership as follows: Angeles 300,000 Bondoc 750,000 Campos 700.000 and share of profits and losses in a ration of 5.3.2, respectively. The partners have agreed to admit Dantes to the partnership REQUIRED Prepare the journal entries to record the admission of Dantes to the partnership under each of the following assumptions.1. Dantes paid Angeles P450.000 for his full interest 2. Dantes invested P500,000 for a 25% interest, and bonus is recorded for Dantes 3 Dantes invested P600,000 for a 20% interest, and bonus is recorded for the old partners.
1
Dengar
Dividing Partnership Income Beau Dawson and Willow McDonald formed a partnership, investing $100,000 and $150,000, respectively. Determine their participation in the year's net income of $290,000 under each of the following independent assumptions: a. No agreement concerning division of net income. b. Divided in the ratio of original capital investment. c. Interest at the rate of 6% allowed on original investments and the remainder divided in the ratio of 2:3. d. Salary allowances of $34,000 and $49,000, respectively, and the balance divided equally. e. Allowance of interest at the rate of 6% on original investments, salary allowances of $34,000 and $49,000, respectively, and the remainder divided equally.