LEARNING TASK NO. 1GENERAL INSTRUCTION: Write your solution and answer on a separate paper and putinitials/signature on every final answer.Problem #1Pedro and Jose form a partnership for the first time. Their investments are; Pedro is to invest cash amounting to P 70,000 and Jose is to contribute Merchandise inventory at a P 10,000 cost with fair value of P 20, 000 and Computerequipment at a cost of P 50, 000 with a fair value of P 30, 000.Required:Prepare the necessary journal entries to record the investment of each partner.Problem #2Jose has been operating a retail store for a number of years. A statement of financial position on July 1, 2021 isprepared for Jose Company as follows:AssetsCashAccounts receivableP 60, 00050, 000InventoryEquipmentLess: Accumulated Depreciation70, 000P 40, 0004. 000 36, 000P 216, 000Total AssetsLiabilities and EquityP 86, 000Accounts payableJose CapitalTotal Liabilities and Equity130, 000P 216, 000Jose needs additional capital to meet the increasing sales and offers Pedro and Interest in the business. Jose and Pedroagree to form a partnership to be known as JP Partnership; Jose's business is audited and its net assets are appraised.The audit and appraisal shows the following:1. Allowance for bad debts of P 5,000 is to be provided.2. Inventory is to be recorded at its fair market value of P 80, 000.3. The equipment is to be valued at 35, 0004. P 2, 000 of accounts payable has not been recorded.On July 1, 2021 Pedro contribute P 100, 000 cash for a one-third capital interest. The JP Partnership is to acquire allof Jose's business and assume its liabilities.Required:Prepare the necessary journal entries to record the formation of the partnership.

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Pedro and Jose form a partnership for the first time. Their investments are; Pedro is to invest cash amounting to P 70, 000 and Jose is to contribute Merchandise inventory at a P 10,000 cost with fair value of P 20, 000 and Computer equipment at a cost of P 50, 000 with a fair value of P 30, 000. Required: Prepare the necessary journal entries to record the investment of each partner.

Pedro and Jose form a partnership for the first time. Their investments are; Pedro is to invest cash amounting to P 70, 000 and Jose is to contribute Merchandise inventory at a P 10,000 cost with fair value of P 20, 000 and Computer equipment at a cost of P 50, 000 with a fair value of P 30, 000. Required: Prepare the necessary journal entries to record the investment of each partner.

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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Concept explainers

Partnership Accounting

A partnership is a kind of arrangement between two or more people whereby they agree to manage the business operations and share its profits and losses in an agreed ratio between them. The agreement that is drafted and signed by the partners of the firm is termed as partnership deed and contains various important clauses agreed between the partners such as profit/loss sharing, interest on capital, remuneration allocation of each partner, drawings, admission of a new partner, etc.

Partner Admission and Withdrawal

A partnership is a kind of arrangement between two or more people whereby they agree to manage the business operations and share its profits and losses in an agreed ratio between them. The agreement that is drafted and signed by the partners of the firm is termed as a partnership deed and contains various important clauses agreed between the partners such as profit/loss sharing, interest on capital, remuneration allocation of each partner, drawings of a partner, etc.

Question

100%

LEARNING TASK NO. 1
GENERAL INSTRUCTION: Write your solution and answer on a separate paper and put
initials/signature on every final answer.
Problem #1
Pedro and Jose form a partnership for the first time. Their investments are; Pedro is to invest cash amounting to P 70,
000 and Jose is to contribute Merchandise inventory at a P 10,000 cost with fair value of P 20, 000 and Computer
equipment at a cost of P 50, 000 with a fair value of P 30, 000.
Required:
Prepare the necessary journal entries to record the investment of each partner.
Problem #2
Jose has been operating a retail store for a number of years. A statement of financial position on July 1, 2021 is
prepared for Jose Company as follows:
Assets
Cash
Accounts receivable
P 60, 000
50, 000
Inventory
Equipment
Less: Accumulated Depreciation
70, 000
P 40, 000
4. 000 36, 000
P 216, 000
Total Assets
Liabilities and Equity
P 86, 000
Accounts payable
Jose Capital
Total Liabilities and Equity
130, 000
P 216, 000
Jose needs additional capital to meet the increasing sales and offers Pedro and Interest in the business. Jose and Pedro
agree to form a partnership to be known as JP Partnership; Jose's business is audited and its net assets are appraised.
The audit and appraisal shows the following:
1. Allowance for bad debts of P 5,000 is to be provided.
2. Inventory is to be recorded at its fair market value of P 80, 000.
3. The equipment is to be valued at 35, 000
4. P 2, 000 of accounts payable has not been recorded.
On July 1, 2021 Pedro contribute P 100, 000 cash for a one-third capital interest. The JP Partnership is to acquire all
of Jose's business and assume its liabilities.
Required:
Prepare the necessary journal entries to record the formation of the partnership.

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