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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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On September 30, 2019, R.Rob and J.Jon, CPAS decided to form a partnership wherein they will participate in the profits in the ratio of 40% and 60%, respectively. Their balances are as follows: Rob Company Statement of Financial Position September 30,2019 Assets Cash Accounts Receivable Less:Allowance for Uncollectible accounts P 80,00 P 800,000 80,000 P 250,000 50.000 720,000 Equipment Less:Accumulated Depreciation Total Assets 200,000 P 1,000,000 Liabilities and Capital Accounts payable R.Rob, Capital Total Liabilities and Capital P 400,000 600,000 P 1,000,000
Transcribed Image Text:On September 30, 2019, R.Rob and J.Jon, CPAS decided to form a partnership wherein they will participate in the profits in the ratio of 40% and 60%, respectively. Their balances are as follows: Rob Company Statement of Financial Position September 30,2019 Assets Cash Accounts Receivable Less:Allowance for Uncollectible accounts P 80,00 P 800,000 80,000 P 250,000 50.000 720,000 Equipment Less:Accumulated Depreciation Total Assets 200,000 P 1,000,000 Liabilities and Capital Accounts payable R.Rob, Capital Total Liabilities and Capital P 400,000 600,000 P 1,000,000
Jon Company Statement of Financial Position September 30,2019 Assets Cash Accounts Receivable Less:Allowance for Uncollectible accounts Equipment Less: Accumulated Depreciation Total Assets P 350,000 P 300,000 30,000 P 450,000 90.000 270,000 360,000 P 980,000 Liabilities and Capital Accounts payable Jon, Capital Total Liabilities and Capital P 290,000 690.000 P 980,000 Conditions agreed upon before the formation are as follows: The accounts receivable of both parties are estimated to be 15% uncollectible. The equipment of R.Rob should be valued at P 180,000. The equipment of J. Jon should be valued at P 375,000. Prepaid expenses of P 20,000 and accrued expenses of P 25,000 are to be taken up in the books of J.Jon. The new capital of the partnership is based on the adjusted capital balance of J.Jon so that R. Rob may either withdraw or contribute additional cash in order to make the partner's capital balance proportionate to their profits or loss ratio. This is not recorded in the books of R.Rob. REQUIRED: a.) Prepare journal entries respective books of accounts. b.) Prepare the required journal entries in the new partneship books, to record the investment of the partners. the boo of and J.Jon to record the adjustments of assets and and the closing of their
Transcribed Image Text:Jon Company Statement of Financial Position September 30,2019 Assets Cash Accounts Receivable Less:Allowance for Uncollectible accounts Equipment Less: Accumulated Depreciation Total Assets P 350,000 P 300,000 30,000 P 450,000 90.000 270,000 360,000 P 980,000 Liabilities and Capital Accounts payable Jon, Capital Total Liabilities and Capital P 290,000 690.000 P 980,000 Conditions agreed upon before the formation are as follows: The accounts receivable of both parties are estimated to be 15% uncollectible. The equipment of R.Rob should be valued at P 180,000. The equipment of J. Jon should be valued at P 375,000. Prepaid expenses of P 20,000 and accrued expenses of P 25,000 are to be taken up in the books of J.Jon. The new capital of the partnership is based on the adjusted capital balance of J.Jon so that R. Rob may either withdraw or contribute additional cash in order to make the partner's capital balance proportionate to their profits or loss ratio. This is not recorded in the books of R.Rob. REQUIRED: a.) Prepare journal entries respective books of accounts. b.) Prepare the required journal entries in the new partneship books, to record the investment of the partners. the boo of and J.Jon to record the adjustments of assets and and the closing of their
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