On October 1, A and B pooled their assets to form aPartnership, with the firm to take over the business assetsand assume liabilities. Partners capitals are to be based onnet assets transferred after the following adjustments.The partners agreed to the following adjustments:1. A's inventory is to be increased by P15,000, while B'sinventory has a current fair market value of P100,000and an agreed value of P110,000. B's unadjustedinventory amounted to P90,000.2. Machinery and equipment are over-depreciated byP5,000 and P8,000 for A and B, respectively.3. Furnitures and fixtures for partner A has a current fairmarket value of P60,000 and an agreed value ofP50,000. Furnitures and fixtures is carried at its costamounting to P100,000 with accumulateddepreciation of P45,000.4. Accrued rent income of P10,000 for A, and accruedsalaries of P5,000 for B should be recognized on theirrespective books.The individual trial balances on October 1, beforeadjustments, follow:DESCRIPTIONABAssetsP120,000 P130,000Liabilities50,00060,000Determine the total capital balance of the Partnershipafter formation.

Partnership means where two or more person comes together to do some common business activity and…

Answered: On October 1, A and B pooled their…

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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Jasmine Partnership began its first year of operations with the following capital balances: J, Capital: $143,000 A, Capital: $104,000 S, Capital: $143,000 The Articles of Partnership stipulated that profits and losses be assigned in the following manner: - J was to be awarded an annual salary of $26,000 with $13,000 salary assigned to C - Each partner was to be attributed with interest equal to 10% of the capital balance as of the first day of the year - The remainder was to be assigned on a 4:3:3 basis, respectively. - Each partner was allowed to withdraw up to $13,000 per year. If the net loss for the first year of operations was $36,000 with net income of $42,000 in the second year. Assume also that each partner withdrew the maximum amount from the business each year. a. How much was the share of income or loss for the first year of S? b. How much was the balance in the capital account at the end of the second year of S?
The balance in Xue's capital account includes an additional investment of $10,000 made on May 5, 20Y2. Instructions: 1. Prepare an income statement for 20Y2, indicating the division of net income. The partnership agreement provides for salary allowances of $38,000 to Ramirez and $46,000 to Xue, allowances of 10% on each partner's capital balance at the beginning of the fiscal year, and equal division of the remaining net income or a net loss. 2. prepare a statement of partnership equity for 20Y2. 3. Prepare a balance sheet as of the end of 20Y2.
Kind and Lucky formed a partnership by contributing cash amounting to P240,000 and P480,000 respectively on January 1, 2021. They agreed to share profits and losses in the ratio of 3:2. During the first year of operation, both Kind and Lucky made a withdrawal of P50,000 and P80,000 respectively. They also reported a net profit of P175,000. At the start of the following year, they agreed to admit Mature into the partnership by investing P300,000 for a one-fourth interest. How much is the total amount of asset revaluation?
How much is the capital of Adee upon partnership formation?
On April 30, 2021, AAA admits BBB for an interest in his business. On this date, AAA's capital account shows a balance of P 158,400. The following were agreed upon before the formation of the partnership: Prepaid expenses of P17,500 and accrued expenses of P5,000 are to be recognized. 5% of the outstanding accounts receivable of AAA amounting to P100,000 is to be recognized as uncollectible. BBB is to be credited with a one-third interest in the partnership and is to invest cash. Determine the amount of cash to be invested by BBB:
Magalang, Matulungin, Masipag and Matapat are partners sharing earnings in the ratio of 3:6:9:12. The balance of their capital accounts on June 30, 2021 are as follows: Magalang – P2,000; Matulungin –P50,000; Masipag – P50,000; Matapat – P18,000 The partners decided to liquidate, and they accordingly convert the non-cash assets into P46, 400 of cash. After paying the liabilities amounting toP16,000, they have P70,000 to divide. Assume all partners are solvent. How much is the total assets of the partnership?Required to answer. Single choice. a. P126,000 b. P39,600 c. P86,400 d. P16,000
A and S are partners sharing profit and loss in the ratio of 3:1. Their Statement of Financial Position(Balance Sheet) stood as at 31.12.2020 as follows: A and S Partnership Statement of Financial Position(Balance Sheet) As at 31st December 2020 ASSETS Current Assets Kshs' Kshs' Cash and Cash Equivalent 26,000 Investments 24,000 Prepaid Insurance Debtors 26,000 Less Provision for Doubtful Debts 26,000 Inventories(stock) 40,000 Total Current Assets 116,000 Non Current Assets Machinery Less:Accumulated Depreciation 10,000 10,000 Buildings 60,000 Less:Accumulated Depreciation - 60,000 Furniture 30,000 Less:Accumulated Depreciation -…
The K & L Partnership was established since 2005. On January 1, 2015, the partners agree to admit partner (M). Capital account balances and profit and loss sharing ratios at January 1, 2015, before the admission of partner (M), are as follows: Partner (K) (30%) $63,000 Partner (L) (70%) $97,000 at the time of admission the following assets have a book value and fair value as: Book Value Fair value Inventory 100,000 120,000 Building 130,000 100,000 Partner (M) invested $120,000 cash to the partners for 50% of capital interest and the partners agree about assets non-revaluation. The journal entry to record the admission of partner (M) is a. Dr. Cash $120,000/Cr. (K) capital $6,000, (L) capital $14,000, (M) capital $100,000. a. Dr. Cash $120,000/Cr. (K) capital $6,000, (L)…

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