11.NAME:SECTION:Partnerships: Basic Considerations and Formation 465Problem #3A Sole Proprietor and an Individual with No Business Form a PartnershipSCORE:PROFESSOR:Espanol operated a specialty shop that sold fishing equipment and accessories. Herpost-closing trial balance on Dec. 31, 2022 is as follows:Accounts PayableEspanol, CapitalCashAccounts ReceivableAllowance for Uncollectible AccountsInventoryEquipmentAccumulated DepreciationFishPost-Closing Trial BalanceDec. 31, 2022DebitP 36,000150,000440,000135,000P761,000CreditP 16,00075,00030,000640,000P761,000Espanol plans to enter into a partnership with trusted associate, Selisana, effective Jan.1, 2023. Profits or losses will be shared equally., Espanol is to transfer all assets andliabilities of her shop to the partnership after revaluation.Selisana will invest cash equal to Espanol's investment after revaluation. The agreedvalues are as follows: accounts receivable (net), P140,000; inventory, P460,000; andequipment (net), P124,000. The partnership will operate under the business name ofFish R' Us.Required:1. Prepare the opening journal entries in the books of the partnership.2. Prepare the partnership's statement of financial position as at the date of formationof the partnership.

Accounting treatment of formation of Partnership If the potential partners already own a business,…

Fish R' Us. Required: 1. Prepare the opening journal entries in the books of the partnership. 2. Prepare the partnership's statement of financial position as at the date of formation of the partnership.

Fish R' Us. Required: 1. Prepare the opening journal entries in the books of the partnership. 2. Prepare the partnership's statement of financial position as at the date of formation of the partnership.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Q: Within a partnership, what is required before making a decision to admit a new partner or engage in…

A: It's important for partnerships to clearly outline decision-making processes in their partnership…

Q: Which of the following factors, if properly established, would determine if property belongs to a…

A: In the given question we need to evaluate the factors, if properly established, would determine if…

Q: Dec 1 Miranda invested P150,000 in the firm. 2 Paid rent for December to Recoletos Realty,…

A: Journal entries: Journal entries are the accounting treatment done in the books of accounts for all…

Q: "a partnership balance sheet is a document that is used to keep track of the relationship of the…

A: Partnership: A legal agreement between two or more individuals for the purpose of operating a…

Q: On Dissolution of a partnership firm, the claims of the partners on their capital will be listed for…

A: Answer

Q: Alex and Bess have been in partnership for many years. The partners, who share profits and losses on…

A: The process of dissolving a partnership and allocating the assets and liabilities among the partners…

Q: What is a summary of the changes in each partner's capital in a partnership that have occurred…

A: Financial statements: These imply to the written records that are maintained by the business related…

Q: Which of the following is TRUE of a written partnership agreement? O It is an agreement in which the…

A: Partnership is legal agreement between two or more person in which they writes about the;- profit…

Q: Notes: Each group is required to use other related partnership business information unique to each…

A: While preparing the current a/c of the partners, all the items which do not form part of the capital…

Q: Which of the following is true in relation to a partnership? a. A partnership is a separate legal…

A: Partnership means where two or more person comes together to do some common business activity and…

Question

1
1
.
NAME:
SECTION:
Partnerships: Basic Considerations and Formation 465
Problem #3
A Sole Proprietor and an Individual with No Business Form a Partnership
SCORE:
PROFESSOR:
Espanol operated a specialty shop that sold fishing equipment and accessories. Her
post-closing trial balance on Dec. 31, 2022 is as follows:
Accounts Payable
Espanol, Capital
Cash
Accounts Receivable
Allowance for Uncollectible Accounts
Inventory
Equipment
Accumulated Depreciation
Fish
Post-Closing Trial Balance
Dec. 31, 2022
Debit
P 36,000
150,000
440,000
135,000
P761,000
Credit
P 16,000
75,000
30,000
640,000
P761,000
Espanol plans to enter into a partnership with trusted associate, Selisana, effective Jan.
1, 2023. Profits or losses will be shared equally., Espanol is to transfer all assets and
liabilities of her shop to the partnership after revaluation.
Selisana will invest cash equal to Espanol's investment after revaluation. The agreed
values are as follows: accounts receivable (net), P140,000; inventory, P460,000; and
equipment (net), P124,000. The partnership will operate under the business name of
Fish R' Us.
Required:
1. Prepare the opening journal entries in the books of the partnership.
2. Prepare the partnership's statement of financial position as at the date of formation
of the partnership.

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Step 3

VIEW

Step by step

Solved in 3 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions

When preparing Form 1065, U.S. Return of Partnership Income, what entries must be made in order for the partners to claim the qualified business income (QBI) deduction? The appropriate adjustments must be made on the partnership's balance sheet and reported correctly on page 5 of Form 1065. Each partner's Schedule K-1 (Form 1065) should report the amount of their QBI deduction in Part III, box 13, other deductions. The information each partner will need to calculate their share of the QBI deduction should be reported on their Schedule K-1 (Form 1065), box 20, other information, or an attached statement. The QBI deduction will reduce the amount of the partnership's ordinary business income and must be included in total deductions reported on page 1 of Form 1065.
Which of the following best describes the articles of partnership agreement? Multiple Choice The articles of partnership are a legal covenant that may be expressed orally or in writing, and forms the central governance for a partnership's operations. The articles of partnership are an agreement that limits partners' liability to partnership assets. The articles of partnership are a legal covenant and must be expressed in writing to be valid. The purpose of the partnership and partners' rights and responsibilities are required elements of the articles of partnership.
The characteristic of a partnership where a partner is an agent for other partners and the partnership when transacting partnership business is: a. a fiduciary relationship b. tenancy in partnership c. mutual agency d. the proprietary theory
Required Information [The following Information applies to the questions displayed below.] A = The amount of tangible assets contributed by the new partner into the partnership B=The amount of capital credited to the new partner C= Total capital of the partnership before the admission of a new partner D= Total capital of the partnership after the admission of a new partner Refer to the above information. Which statement below is correct if goodwill of the old partners is recognized upon the contribution of assets into the partnership by a new partner? Multiple Choice B=A and DA and D
The basis of a partner's interest in a partnership, particularly a trading partnership, is always the same as the partner's capital account balance. True O Fabe
A well written partnership agreement should include each of the following except how to settle disputes the name of the partnership division of responsibilities Partner's individual tax rate
Hi, can someone help me with this question please?
The book states "a partnership balance sheet is a document that is used to keep track of the relationship of the partnership to the partners and the partners to each other, both from a tax perspective and a economic perspective." What is meant by economic perspective (focus at point of formation)?