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Illustration. The balance sheet of Mateo Roa on Oct. 1, 2021, before accepting Martin Penaco as his partner is shown below: Mateo Roa Balance Sheet October 1, 2021 Assets Cash P 60,000 30,000 Notes Receivable Accounts Receivable 230,000 Less: Allowance for Uncollectible Accts. Merchandise Inventory 80,000 Furniture and Fixtures Less: Accumulated Depreciation Total Assets 54,000 P. 454.000 Liabilities and Owner's Equity Notes Payable P 40,000 Accounts Payable 100,000 Mateo Roa, Capital 314,000 Total Liabilities and Owner's Equity P454.000 Martin Penaco offered to invest cash to give him a capital credit equal to one-half of Mateo Roa's capital after giving effect to the adjustments below. Roa accepted the offer. 1. The merchandise is to be valued at P74,000. 2. The accounts receivable is estimated to be 95% collectible. 3. Interest accrued on the notes receivable will be recognized: P10,000, 12% dated July 1, 2021 and P20,000, 12% dated August 1, 2021. 4. Interest on notes payable to be accrued at 14% annually from Apr. 1.2021 5. The furniture and fixtures are to be valued at P46,000. 6. Office supplies on hand that have been charged to expense in the past amounted to P4,000. These will be used by the partnership. New books for the Partnership. The following procedures may be used in recording the formation of the partnership: Books of Mateo Roa: 1. Adjust the assets and liabilities of Mateo Roa in accordance with the agreement. Adjustments are to be made to his capital account. 2. Close the books. Books of the Partnership: 1. Record the investment of Mateo Roa. 2. Record the investment of Martin Penaco. P 240,000 10,000 P 60,000 6,000

Illustration. The balance sheet of Mateo Roa on Oct. 1, 2021, before accepting Martin Penaco as his partner is shown below: Mateo Roa Balance Sheet October 1, 2021 Assets Cash P 60,000 30,000 Notes Receivable Accounts Receivable 230,000 Less: Allowance for Uncollectible Accts. Merchandise Inventory 80,000 Furniture and Fixtures Less: Accumulated Depreciation Total Assets 54,000 P. 454.000 Liabilities and Owner's Equity Notes Payable P 40,000 Accounts Payable 100,000 Mateo Roa, Capital 314,000 Total Liabilities and Owner's Equity P454.000 Martin Penaco offered to invest cash to give him a capital credit equal to one-half of Mateo Roa's capital after giving effect to the adjustments below. Roa accepted the offer. 1. The merchandise is to be valued at P74,000. 2. The accounts receivable is estimated to be 95% collectible. 3. Interest accrued on the notes receivable will be recognized: P10,000, 12% dated July 1, 2021 and P20,000, 12% dated August 1, 2021. 4. Interest on notes payable to be accrued at 14% annually from Apr. 1.2021 5. The furniture and fixtures are to be valued at P46,000. 6. Office supplies on hand that have been charged to expense in the past amounted to P4,000. These will be used by the partnership. New books for the Partnership. The following procedures may be used in recording the formation of the partnership: Books of Mateo Roa: 1. Adjust the assets and liabilities of Mateo Roa in accordance with the agreement. Adjustments are to be made to his capital account. 2. Close the books. Books of the Partnership: 1. Record the investment of Mateo Roa. 2. Record the investment of Martin Penaco. P 240,000 10,000 P 60,000 6,000

FINANCIAL ACCOUNTING
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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Illustration. The balance sheet of Mateo Roa on Oct. 1, 2021, before accepting Martin Penaco as his partner is shown below: Mateo Roa Balance Sheet October 1, 2021 Assets Cash P 60,000 Notes Receivable 30,000 Accounts Receivable Less: Allowance for Uncollectible 230,000 Accts. Merchandise Inventory 80,000 Furniture and Fixtures Less: Accumulated Depreciation 54,000 P454.000 Total Assets Liabilities and Owner's Equity Notes Payable Accounts Payable P 40,000 100,000 314,000 Mateo Roa, Capital Total Liabilities and Owner's Equity P 454.000 Martin Penaco offered to invest cash to give him a capital credit equal to one-half of Mateo Roa's capital after giving effect to the adjustments below. Roa accepted the offer. 1. The merchandise is to be valued at P74,000. 2. The accounts receivable is estimated to be 95% collectible. 3. Interest accrued on the notes receivable will be recognized: P10,000, 12% dated July 1, 2021 and P20,000, 12% dated August 1, 2021. 4. Interest on notes payable to be accrued at 14% annually from Apr. 1.2021 5. The furniture and fixtures are to be valued at P46,000. 6. Office supplies on hand that have been charged to expense in the past amounted to P4,000. These will be used by the partnership. New books for the Partnership. The following procedures may be used in recording the formation of the partnership: Books of Mateo Roa: 1. Adjust the assets and liabilities of Mateo Roa in accordance with the agreement. Adjustments are to be made to his capital account. 2. Close the books. Books of the Partnership: 1. Record the investment of Mateo Roa. 2. Record the investment of Martin Penaco. P 240,000 10,000 P 60,000 6,000
Transcribed Image Text:Illustration. The balance sheet of Mateo Roa on Oct. 1, 2021, before accepting Martin Penaco as his partner is shown below: Mateo Roa Balance Sheet October 1, 2021 Assets Cash P 60,000 Notes Receivable 30,000 Accounts Receivable Less: Allowance for Uncollectible 230,000 Accts. Merchandise Inventory 80,000 Furniture and Fixtures Less: Accumulated Depreciation 54,000 P454.000 Total Assets Liabilities and Owner's Equity Notes Payable Accounts Payable P 40,000 100,000 314,000 Mateo Roa, Capital Total Liabilities and Owner's Equity P 454.000 Martin Penaco offered to invest cash to give him a capital credit equal to one-half of Mateo Roa's capital after giving effect to the adjustments below. Roa accepted the offer. 1. The merchandise is to be valued at P74,000. 2. The accounts receivable is estimated to be 95% collectible. 3. Interest accrued on the notes receivable will be recognized: P10,000, 12% dated July 1, 2021 and P20,000, 12% dated August 1, 2021. 4. Interest on notes payable to be accrued at 14% annually from Apr. 1.2021 5. The furniture and fixtures are to be valued at P46,000. 6. Office supplies on hand that have been charged to expense in the past amounted to P4,000. These will be used by the partnership. New books for the Partnership. The following procedures may be used in recording the formation of the partnership: Books of Mateo Roa: 1. Adjust the assets and liabilities of Mateo Roa in accordance with the agreement. Adjustments are to be made to his capital account. 2. Close the books. Books of the Partnership: 1. Record the investment of Mateo Roa. 2. Record the investment of Martin Penaco. P 240,000 10,000 P 60,000 6,000
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