Kareen Labor, Lalaine Dajao and Leah Magno were partners in a business engaged in printing and publishing. The statement of financial position reveals that their business has no obligation to outside creditors. The partners share profit or loss 30%, 20%, and 50%, respectively. ASSETS PARTNER'S EQUITY Cash 120,000 Labor, Capital 400,000 Accounts receivable 150,000 Dajao, Capital 280,000 Inventory 260,000 Magno, Capital 150,000 Equipment 300,000 Total 830,000 Total 830,000 On January 1, 2021, the partners agree to admit Jimwell Acenas as a new partner after considering the following revaluation and adjustments: 1. Allowance for doubtful accounts of P20,000 is to be established for possible uncollectible account. 2. Inventories should be recorded at their net realizable value of P240,000. 3. The net book value of the equipment should be adjusted at P250,000. 4. Accrued expenses should be recognized, P10,000. Required: 1) Prepare the necessary journal entries 2) Record the admission of Acenas assuming: a) he purchases 1/3 of the partnership’s interest b) he invests P200,000 for a 1/3 interest on agreed capitalization of P930,000. c) he invests P200,000 for a 1/5 interest in the new firm’s capital of P930,000
Kareen Labor, Lalaine Dajao and Leah Magno were partners in a business engaged in printing
and publishing. The
to outside creditors. The partners share profit or loss 30%, 20%, and 50%, respectively.
ASSETS PARTNER'S EQUITY
Cash 120,000 Labor, Capital 400,000
Accounts receivable 150,000 Dajao, Capital 280,000
Inventory 260,000 Magno, Capital 150,000
Equipment 300,000
Total 830,000 Total 830,000
On January 1, 2021, the partners agree to admit Jimwell Acenas as a new partner after
considering the following revaluation and adjustments:
1. Allowance for doubtful accounts of P20,000 is to be established for possible uncollectible
account.
2. Inventories should be recorded at their net realizable value of P240,000.
3. The net book value of the equipment should be adjusted at P250,000.
4. Accrued expenses should be recognized, P10,000.
Required:
1) Prepare the necessary journal entries
2) Record the admission of Acenas assuming:
a) he purchases 1/3 of the
b) he invests P200,000 for a 1/3 interest on agreed capitalization of P930,000.
c) he invests P200,000 for a 1/5 interest in the new firm’s capital of P930,000
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