Compute the bet (debit) credit adjustment for sarabia and abad partnership. Their statements of financial position on Mar. 1, before adjustments, .2. On Mar. 1, 2016, Sarabia and Abad decided to combine their businesses and forshowed the following:SarabiaAbadP 9,00018,50030,00030,00011,500P 3,75013,50019,5009,000CashAccounts receivableInventoriesFurniture and Fixtures (net)Office Equipment (net)Prepaid Expenses2,7506,375P105,3753,000P51,500TotalP 45,75059,625P105,375P18,000Accounts PayableCapital33,500P51,500TotalThey agreed to have the following items recordéd in their books:Provide 2% allowance for doubtful accounts.Sarabia's furniture and fixtures should be P31,000, while Abad's office1.2.equipment is under-depreciated by P250.Rent expense incurred previously by Sarabia was not yet recorded amounting toP1,000, while salary expense incurred by Abad was not also recorded amounting3.to P800.The fair market values of inventory amounted to:For SarabiaP29,500For Abad21,000

ANSWER Computation of Net(debit) credit adjustment for Sarabia and Abad:

partnership. Their statements of financial position on Mar. 1, before adjustments, On Mar. 1, 2016, Sarabia and Abad decided to combine their businesses and for showed the following: Sarabia Abad P 9,000 18,500 30,000 30,000 11,500 6,375 P105,375 P 3,750 13,500 19,500 Cash Accounts receivable Inventories Furniture and Fixtures (net) Office Equipment (net) Prepaid Expenses 9,000 2,750 3,000 P51,500 Total P 45,750 59,625 P105,375 Accounts Payable P18,000 33,500 P51,500 Capital Total They agreed to have the following items recordėd in their books: Provide 2% allowance for doubtful accounts. Sarabia's furniture and fixtures should be P31,000, while Abad's office equipment is under-depreciated by P250. Rent expense incurred previously by Sarabia was not yet recorded amounting to P1,000, while salary expense incurred by Abad was not also recorded amounting .1. 2. 3. to P800. 4. The fair market values of inventory amounted to: For Sarabia P29,500

partnership. Their statements of financial position on Mar. 1, before adjustments, On Mar. 1, 2016, Sarabia and Abad decided to combine their businesses and for showed the following: Sarabia Abad P 9,000 18,500 30,000 30,000 11,500 6,375 P105,375 P 3,750 13,500 19,500 Cash Accounts receivable Inventories Furniture and Fixtures (net) Office Equipment (net) Prepaid Expenses 9,000 2,750 3,000 P51,500 Total P 45,750 59,625 P105,375 Accounts Payable P18,000 33,500 P51,500 Capital Total They agreed to have the following items recordėd in their books: Provide 2% allowance for doubtful accounts. Sarabia's furniture and fixtures should be P31,000, while Abad's office equipment is under-depreciated by P250. Rent expense incurred previously by Sarabia was not yet recorded amounting to P1,000, while salary expense incurred by Abad was not also recorded amounting .1. 2. 3. to P800. 4. The fair market values of inventory amounted to: For Sarabia P29,500

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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