Gloria Detoya and Esterlina Gevera have operated a successful partnership for years, sharing profit and losses equally. Evangelina Madelo is to be admitted to the partnership on June 1 of the current year, in accordance with the following agreement: many a. Assets and liabilities of the old partnership are to be valued at their book values of May 31, except for the following: Accounts receivable amounting to P20,000 are to be written off, and the allowance for uncollectible accounts is to be increased to 5% of the remaining accounts. Merchandise inventory is to be valued at P638,700. Equipment is to be valued at P900,000. b. Madelo is to purchase P300,000 of the ownership interest of Gevera for P375,000 cash and to contribute P350,000 cash to the partnership for a total ownership equity of P650,000. c. The income-sharing ratio of Detoya, Gevera, and Madelo is to be 2:1:1. The post-closing trial balance of Detoya and Gevera as of May 31 follows: Detoya and Gevera Post-Closing Trial Balance May 31, 2019 Cash - 95,000 Accounts Receivable - 214,000 Allowance for Uncollectible Accounts - 5,000 Merchandise Inventory - 586,000 Prepaid Insurance - 35,000 Equipment - 950,000 Accumulated Depreciation-Equipment - 257,000 Detoya, Capital - 750,000 Gevera, Capital - 600,000 Notes Payable - 120,000 Accounts Payable - 148,000 Required: Prepare the balance sheet for the new partnership as at June 1, 2019.

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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Gloria Detoya and Esterlina Gevera have operated a successful partnership for years, sharing profit and losses equally. Evangelina Madelo is to be admitted to the partnership on June 1 of the current year, in accordance with the following agreement: many a. Assets and liabilities of the old partnership are to be valued at their book values of May 31, except for the following: Accounts receivable amounting to P20,000 are to be written off, and the allowance for uncollectible accounts is to be increased to 5% of the remaining accounts. Merchandise inventory is to be valued at P638,700. Equipment is to be valued at P900,000. b. Madelo is to purchase P300,000 of the ownership interest of Gevera for P375,000 cash and to contribute P350,000 cash to the partnership for a total ownership equity of P650,000. c. The income-sharing ratio of Detoya, Gevera, and Madelo is to be 2:1:1. The post-closing trial balance of Detoya and Gevera as of May 31 follows: Detoya and Gevera Post-Closing Trial Balance May 31, 2019 Cash - 95,000 Accounts Receivable - 214,000 Allowance for Uncollectible Accounts - 5,000 Merchandise Inventory - 586,000 Prepaid Insurance - 35,000 Equipment - 950,000 Accumulated Depreciation-Equipment - 257,000 Detoya, Capital - 750,000 Gevera, Capital - 600,000 Notes Payable - 120,000 Accounts Payable - 148,000 Required: Prepare the balance sheet for the new partnership as at June 1, 2019.

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