• On September 13, 2016, AA and BB decided to combine their assets and form a partnership. The partnership is to take over the business assets and assume the business liabilities; and capitals are to be based on net assets transferred after the following adjustments: 1. BB's inventory is to be valued at P140,000. 2. A5% allowance for uncollectible accounts is to be established a the accounts receivable of each party. 3. Accrued liabilities of P8,000 are to be recognized in AA's books. The statements of financial position on September 13 before adjustments are given below. AA BB Cash P75.000 P45.000 Accounts Recetvable 180,000 150,000 Inventory 160,000 120,000 Property and Equipment 100,000 120,000 Accumulated Depreciation (L5000) (15.000) 420,000 Accounts Payable 138,000 100,000 Capital 332.000 320 000 479,000 420.000 Required: 1. Prepare the entries to adjust and close books of AA and BB. 2. Prepare the opening entries in the books of the partnership 3. Prepare the statement of financial position as at September 13, 2016.

• On September 13, 2016, AA and BB decided to combine their assets and form a partnership. The partnership is to take over the business assets and assume the business liabilities; and capitals are to be based on net assets transferred after the following adjustments: 1. BB's inventory is to be valued at P140,000. 2. A5% allowance for uncollectible accounts is to be established a the accounts receivable of each party. 3. Accrued liabilities of P8,000 are to be recognized in AA's books. The statements of financial position on September 13 before adjustments are given below. AA BB Cash P75.000 P45.000 Accounts Recetvable 180,000 150,000 Inventory 160,000 120,000 Property and Equipment 100,000 120,000 Accumulated Depreciation (L5000) (15.000) 420,000 Accounts Payable 138,000 100,000 Capital 332.000 320 000 479,000 420.000 Required: 1. Prepare the entries to adjust and close books of AA and BB. 2. Prepare the opening entries in the books of the partnership 3. Prepare the statement of financial position as at September 13, 2016.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

ASSESSMENT ACTIVITIES: PARTNERSHIP ACCOUNTING Activity 3: The partnership of Kobe and Lebron began business on January 2, 2021. Each partner confributed the following assets (the noncash assets are stated at their fair values on January 1, 2021: Cash Inventory Land Kobe P 600,000 800,000 -0- 1.000,000 Lebron P 500,000 LOUIS Equipment 1,300,000 -0- The land was subject to a P500,000 mortgage, which the partnership assumed on January 1, 2021. The equipment was subject to an installment notes payable that had an unpaid principal amount of P200,000 on January 1, 2021. The partnership also assumed this notes payable. Kobe and Lebron agreed to share partnership income and losses in the following manner: Interest on beginning capital balances Salaries Remainder Jenny 3% 120,000 Kenny 3% 120,000 60% 40% During 2021, the following events occurred: 1. Inventory was acquired at a cost P300,000. At December 31, 2021, the partnership owed P60,000 to its suppliers. 2. Principal of P50,000 was paid…
The following is the trail Balance of X and Y Co. as on March 31, 2021. The partners sharing profits and losses in the ratio 2:1. Prepare the Income Statement, Profit & Loss Appropriation A/c, Partners' Capital A/c and the Balance Sheet. Particulars Dr. Particulars Cr. 375000 x Capital A/c 112500 Y Capital A/c 50000 Sundry creditors 100000 Sales (net) 50000 Discount Land and Buildings Plant and Machinery 125000 75000 Wages 62500 Opening Stock of Finished Goods 812500 Opening Stock of Raw material Opening Stock of Work in Progress Sundry debtors 6250 45000 Provision for bad debts 3750 125000 Commission 3750 Y's Loan A/c 2250 25000 Carriage inwards 75000 Carriage outwards Factory Expenses 18750 Royalties 3750 Purchase of Raw material (net) 187500 16250 7250 10000 Factory rent & taxes Discount Office rent Insurance 5000 3750 18750 30000 20500 1185000 The following additional information is to be taken into consideration: Bad debts Office Expenses Salaries of works manager Cash at bank…
Problem: Nadine and Lysa formed a partnership on Jan. 01, 2019. Below the details of their capital accounts for 2019: Nadine, Capital Lysa, Capital 1-Jul 200,000 500,000 1-Jan 300,000 300,000 31-Dec 150,000 450,000 On the same year, the partnership generated a profit of P200,000. Required: Determine the Profit Ratio and the share on profits for Nadine and Lysa on the following agreements: A. If agreement is based on Capital Contributions: Nadine Lysa 1 Profit Ratio 4 Share on Profit B. If agreement is based on Average Capital: Nadine Lysa 5 Profit Ratio Share on Profit 2. CO 3.
On December 31, 2030, the Statement of Financial Position of ABC Partnership provided the following data with profit or loss ratio of 5:1:4:Current Assets P 3,000,000 Total Liabilities P 1,000,000 Noncurrent Assets 4,000,000 A, Capital 2,200,000B, Capital 2,400,000C, Capital 1,400,000 On January 1, 2030, D is admitted to the partnership by investing P1,000,000 to the partnership for 10% capital interest. The total agreed capitalization of the new partnership is P6,000,000. What is the capital balance of D after his admission to the partnership?a. P1,000,000b. P600,000c. P700,000d. P800,000
How much is the capital of Adee upon partnership formation?
On May 1, 2022, AA and BB formed a partnership, agreeing to share profits and losses in the ratio of 2:4, respectively. AA invested a portion of land, acquired at P300,000, which was sold immediately at P500,000. BB invested cash of P1 million. How much should be the capital balance of AA right after the partnership formation? O P1,000,000 O P500,000 OP300,000 O P400,000
200. On December 1, 2014, MG and AN are combining their separate businesses to form a partnership. Cash and noncash assets are to be contributed. The noncash assets to be contributed and the liabilities to be assumed are as follows: Accounts Receivable Inventory PPE Accounts Payable MG Book value 250,000 400,000 1,000,000 150,000 A. 1,344,000 B. 1,244,000 C. 3,120,000 D. 2,180,000 Fair value 262,500 450,000 912,500 150,000 AN Book value 200,000 200,000 862,500 112,500 Fair value 195,000 207,500 822,500 112,500 MG and AN are to invest equal amount of cash such that the contribution of MG would be 10% more than the investment of AN. What is the amount of cash presented on the partnership's statement of Financial Position on December 1, 2014?
On April 01, 2022, Chito and Ernie pooled their resources to form a partnership, with the firm taking over their business assets and assuming their business liabilities. On this date, their individual trial balances show the following: Chito Ernie P25,000 150,000 Cash P30,000 220,000 Non cash assets Accounts payable Notes payable Capital 60,000 45,000 100,000 105.000 115.000 The partners agreed that capital ratio must be 40:60 and that additional cash investment is to be made to raise the total capital to P350,000: • Non cash assets should be adjusted to their market values of: Chito, P120,000 and Ernie, P190,000. • Unrecorded liabilities in the books of Chito amounting to P5,000 while acerued interest on notes payable of Emie in the amount of P5,000 is to be recognized Prepaid rent in the books of Ernie amounting to P6,000 is to be recorded. Determine the amount of additional cash invested by Chito to conform with the agreement:
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)…