Prepare journal entry incorporation of Partnership Problem #23Incorporation of a PartnershipThe condensed statement of financial position of the partnership of Buenaflor andGangoso as of Dec. 31, 2019 showed the following:Total AssetsTotal LiabilitiesBuenaflor, CapitalGangoso, CapitalP200,00040,00080,00080,000On this date, the partnership was dissolved and its net assets transferred to a newly-formed corporation. The fair value of the assets was P24,000 more than the carryingvalue on the firm's books. Each of the partners was issued 10,000 shares of thecorporation's P1 par ordinary share.Required:Prepare the journal entries in the books of the corporation.

The partnership refers to a general agreement among the partners for carrying a legal business and…

Answered: Prepare journal entry incorporation of…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

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Prepare journal entry incorporation of Partnership

Problem #23
Incorporation of a Partnership
The condensed statement of financial position of the partnership of Buenaflor and
Gangoso as of Dec. 31, 2019 showed the following:
Total Assets
Total Liabilities
Buenaflor, Capital
Gangoso, Capital
P200,000
40,000
80,000
80,000
On this date, the partnership was dissolved and its net assets transferred to a newly-
formed corporation. The fair value of the assets was P24,000 more than the carrying
value on the firm's books. Each of the partners was issued 10,000 shares of the
corporation's P1 par ordinary share.
Required:
Prepare the journal entries in the books of the corporation.

Definition Definition Arrangement between two or more people whereby they agree to manage business operations and share its profits and losses in an agreed ratio. The agreement 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, and drawings of a partner.

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