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Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:The net realizable value of the inventory is P120,000. Day
Chaple
18
PROBLEM 3: EXERCISES
Night
partnership business:
Day
280,000
100,000
Cash
Accounts receivable
160,000
Inventory
760,000
Building (at carrying amount)
760,000
540,000
Total
Additional information:
Only 60% of the accounts receivable is recoverable.
acquired the inventory on account; the partnership
assume the unpaid balance of P60,000.
The building has a fair value of P900,000.
Requirement: Provide the journal entry.
2. Use the information in problem 1. Day and Night agreed to share
in profits and losses based on a 30:70 ratio. A partner with
deficient contribution shall provide additional cash in order
for his capital balance to reflect his profit and loss sharing
ratio.
Requirement: Provide the entry to record the additional investment
of the partner with deficient contribution.
3. Use the information in problem 1. Day and Night agreed to have
equal credits to their capital accounts. The bonus method shall
be used.
Requirements:
a. Provide the compound journal entry.
b. Provide the simple journal entries.
Transcribed Image Text:Chapter 1
nebit
9,000,000
Partnership Formation
z in forming a
19
4. Use the information in problem 1. Day and Night agreed to have
equal credits to their capital accounts. Cash settlement is to be
made between the partners for the adjustments on their capital
balances.
Requirement: Describe how the cash settlement should be made
and how would it be accounted for in the partnership books.
5. Use the information in problem 1. Day and Night agreed to have
equal credits to their capital accounts. Additional investment
or partial withdrawal shall be made by a partner from the
partnership for any adjustment to his capital balance.t
20,000. Day
ership will
lw.qirsnhg
Requirement: Which partner should make an additional investment
and which partner should make a withdrawal?
010,000
790.000
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