Homework Help is Here – Start Your Trial Now!
Business
Accounting
Prepare and upload journal entries related to the following: 1. Revaluation and accrual of interest; 2. Admission of Melan; and 3. Additional contribution of existing partners, if there is any.

Prepare and upload journal entries related to the following: 1. Revaluation and accrual of interest; 2. Admission of Melan; and 3. Additional contribution of existing partners, if there is any.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
See similar textbooks
icon
Related questions
icon
Concept explainers
Question
EXERCISE 9. Journal Entries: Admission by investment of assets. The real accounts in the ledger of Chua-Tay Partnership showed the following balances before the admission of Melan to the partnership: Cash P 60,000 Accounts Receivable 70,000 Merchandise Inventory 55,000 Machinery 120,000 Accumulated Depreciation - Machinery 21,600 Accounts Payable 40,000 Income Taxes Payable 35,000 Notes Payable 65,000 | Chua, Capital (50%) 58,400 Tay, Capital (50%) 85,000 Additional information: • The parties agreed to revalue the following: (a) Accounts Receivable at 85%; (b) Merchandise Inventory at 110%; and (c) Machinery at 90%. • They also agreed that additional interest of P3,500 on notes payable be accrued. • Melan was to contribute P140,000. It was agreed that after the admission of Melan, all partners' capital balances would equal to the contribution of Melan. Any partner whose capital balance would be below the threshold should contribute additional cash to the partnership. Prepare and upload journal entries related to the following: 1. Revaluation and accrual of interest; 2. Admission of Melan; and 3. Additional contribution of existing partners, if there is any.
Transcribed Image Text:EXERCISE 9. Journal Entries: Admission by investment of assets. The real accounts in the ledger of Chua-Tay Partnership showed the following balances before the admission of Melan to the partnership: Cash P 60,000 Accounts Receivable 70,000 Merchandise Inventory 55,000 Machinery 120,000 Accumulated Depreciation - Machinery 21,600 Accounts Payable 40,000 Income Taxes Payable 35,000 Notes Payable 65,000 | Chua, Capital (50%) 58,400 Tay, Capital (50%) 85,000 Additional information: • The parties agreed to revalue the following: (a) Accounts Receivable at 85%; (b) Merchandise Inventory at 110%; and (c) Machinery at 90%. • They also agreed that additional interest of P3,500 on notes payable be accrued. • Melan was to contribute P140,000. It was agreed that after the admission of Melan, all partners' capital balances would equal to the contribution of Melan. Any partner whose capital balance would be below the threshold should contribute additional cash to the partnership. Prepare and upload journal entries related to the following: 1. Revaluation and accrual of interest; 2. Admission of Melan; and 3. Additional contribution of existing partners, if there is any.
Expert Solution
steps

Step by step

Solved in 3 steps

SEE SOLUTIONCheck out a sample Q&A here
Blurred answer
Knowledge Booster
Partnership Accounting
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education
SEE MORE TEXTBOOKS