Transcribed Image Text:PART I. PARTNERSHIP FORMATION AND OPERATIONS
On April 1, 2020, three existing sole proprietors in Cotabato City agreed to form a partnership to engage in
a manufacturing business. Their contributions are as follow:
Jobert
Manuel
Leopoldo
Zander
Santos
Limba
100,000
Cash in Bank
200,000 | P
200,000 | P
Land
Office Building
Accumulated Depreciation-Office Building
Office Equipment.
Accumulated Depreciation-Office Equipment
Furniture and Fixtures
Accumulated Depreciation-Furniture & Fixtures
Accounts Payable
Mortgage Payable
250,000
600,000
120,000
200,000
40,000
150,000
70,000
3,500
15,000
10,000
10,000
100,000
The partners also agreed that the new partnership will assume their respective sole proprietorship liabilities,
and agreed further that the partnership's starting capitalization should be at P2,000,000, and that they are
to contribute additional cash necessary to make their individual capital to equal their profit and loss ratio of
3:3:4, respectively.
Definition Definition Method of recording financial transactions in the book of original entry by debiting and crediting the accounts affected by a transaction using the golden rules of accrual accounting.
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