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On with the firm to take over their business assets and assume the liabilities. Profits and

On with the firm to take over their business assets and assume the liabilities. Profits and

FINANCIAL ACCOUNTING
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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Oe Iuly i. 20xx. Ferdinand and Imelda pooled their assets to form a partnership, with the firm to take over their business assets and assume the liabilities. Profits and losses are to be divided equally. Partnership capitals are to be based on net assets transferred after the following adjustments: Ferdinand's inventory is to be decreased by P25,000 > An allowance for doubtful accounts of P15,000 and P10,000 are to be set up in the books of Ferdinand and Imelda respectively. > Accounts payable of P20,000 is to be recognized in Imelda's book. > Accrued expenses of P5,000 is to be recognized in Imelda's book. The individual balances of assets and liabilities on June 30, 20xx follow: Ferdinand Imelda Assets P790,000 P770,000 Liabilities 50,000 35,000 1. What is the amount of total assets after the formation? a. P 1,560,000 b. P 1,535,000 c. P 1,510,000 d. None of the above 2. What is the amount of total liabilities after the formation? a. P 85,000 b. P 105,000 c. P 110,000 d. None of the above 3. What is the capital of Ferdinand and Imelda after the adjustments? a. Ferdinand, P 740,000; Imelda, P 735,000 b. Ferdinand, P 700,000; Imelda, P 700,000 c. Ferdinand, P 750,000; Imelda, P 735,000 d. None of the above
Transcribed Image Text:Oe Iuly i. 20xx. Ferdinand and Imelda pooled their assets to form a partnership, with the firm to take over their business assets and assume the liabilities. Profits and losses are to be divided equally. Partnership capitals are to be based on net assets transferred after the following adjustments: Ferdinand's inventory is to be decreased by P25,000 > An allowance for doubtful accounts of P15,000 and P10,000 are to be set up in the books of Ferdinand and Imelda respectively. > Accounts payable of P20,000 is to be recognized in Imelda's book. > Accrued expenses of P5,000 is to be recognized in Imelda's book. The individual balances of assets and liabilities on June 30, 20xx follow: Ferdinand Imelda Assets P790,000 P770,000 Liabilities 50,000 35,000 1. What is the amount of total assets after the formation? a. P 1,560,000 b. P 1,535,000 c. P 1,510,000 d. None of the above 2. What is the amount of total liabilities after the formation? a. P 85,000 b. P 105,000 c. P 110,000 d. None of the above 3. What is the capital of Ferdinand and Imelda after the adjustments? a. Ferdinand, P 740,000; Imelda, P 735,000 b. Ferdinand, P 700,000; Imelda, P 700,000 c. Ferdinand, P 750,000; Imelda, P 735,000 d. None of the above
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