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Problem 2 - 2 (Two Sole Proprietors Form a Partnership; Books of one of the S Proprietors to be used by the Partnership) On October 1, 2014, April and Arias decided to pool their assets and form a partnersh The firm is to take over business assets and assume business liabilities; equities are to based on net assets transferred after the following adjustments: Arias' inventory is to be valued at P350,000. An allowance for uncollectible accounts of P9,000 and P7,500, respectively show be set up. Accrued expenses of P21,000 are to be recognized on April's books. Arias is to contribute sufficient cash to give him a 60% interest in the new firm. a. b. C. d. Statements of financial position for April and Arias on October 1 before adjustments a presented below. Chapter 2-Nature and Formation of a Partnership 1. Cash Accounts Receivable Merchandise Inventory Equipment Accumulated Depreciation Total Assets Instructions: 2. Accounts Payable Capital Total Liabilities and Capital 7 April P 187,500 450,000 400,000 250,000 (112,500) P 1,175,000 345,000 830,000 P 1,175,000 P Give the entries to adjust and close the books of April. Arias P 112,500 375,000 300,000 300,000 (37,500) P 1,050,000 P 250,000 800,000 P 1,050,000 67 Give the entries required on the books of Arias upon the formation of the partnership. Prepare a statement of financial position for the new partnership of April and Arion

Problem 2 - 2 (Two Sole Proprietors Form a Partnership; Books of one of the S Proprietors to be used by the Partnership) On October 1, 2014, April and Arias decided to pool their assets and form a partnersh The firm is to take over business assets and assume business liabilities; equities are to based on net assets transferred after the following adjustments: Arias' inventory is to be valued at P350,000. An allowance for uncollectible accounts of P9,000 and P7,500, respectively show be set up. Accrued expenses of P21,000 are to be recognized on April's books. Arias is to contribute sufficient cash to give him a 60% interest in the new firm. a. b. C. d. Statements of financial position for April and Arias on October 1 before adjustments a presented below. Chapter 2-Nature and Formation of a Partnership 1. Cash Accounts Receivable Merchandise Inventory Equipment Accumulated Depreciation Total Assets Instructions: 2. Accounts Payable Capital Total Liabilities and Capital 7 April P 187,500 450,000 400,000 250,000 (112,500) P 1,175,000 345,000 830,000 P 1,175,000 P Give the entries to adjust and close the books of April. Arias P 112,500 375,000 300,000 300,000 (37,500) P 1,050,000 P 250,000 800,000 P 1,050,000 67 Give the entries required on the books of Arias upon the formation of the partnership. Prepare a statement of financial position for the new partnership of April and Arion

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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Problem 2-2 (Two Sole Proprietors Form a Partnership; Books of one of the Sole Proprietors to be used by the Partnership) A On October 1, 2014, April and Arias decided to pool their assets and form a partnership The firm is to take over business assets and assume business liabilities; equities are to be based on net assets transferred after the following adjustments: Arias' inventory is to be valued at P350,000. An allowance for uncollectible accounts of P9,000 and P7,500, respectively should be set up. a. b. C. d. Statements of financial position for April and Arias on October 1 before adjustments are presented below. Accrued expenses of P21,000 are to be recognized on April's books. Arias is to contribute sufficient cash to give him a 60% interest in the new firm. 1. Chapter 2-Nature and Formation of a Partnership 2 Cash Accounts Receivable Merchandise Inventory Equipment Accumulated Depreciation Total Assets Instructions: 3. Accounts Payable Capital Total Liabilities and Capital April P 187,500 450,000 400,000 250,000 (112,500) P 1,175,000 P 345,000 830,000 P 1,175,000 Give the entries to adjust and close the books of April. Arias P 112,500 375,000 300,000 300,000 37,500) P 1,050,000 P 250,000 800,000 P 1,050,000 67 Give the entries required on the books of Arias upon the formation of the partnership. Prepare a statement of financial position for the new partnership of April and Arion
Transcribed Image Text:Problem 2-2 (Two Sole Proprietors Form a Partnership; Books of one of the Sole Proprietors to be used by the Partnership) A On October 1, 2014, April and Arias decided to pool their assets and form a partnership The firm is to take over business assets and assume business liabilities; equities are to be based on net assets transferred after the following adjustments: Arias' inventory is to be valued at P350,000. An allowance for uncollectible accounts of P9,000 and P7,500, respectively should be set up. a. b. C. d. Statements of financial position for April and Arias on October 1 before adjustments are presented below. Accrued expenses of P21,000 are to be recognized on April's books. Arias is to contribute sufficient cash to give him a 60% interest in the new firm. 1. Chapter 2-Nature and Formation of a Partnership 2 Cash Accounts Receivable Merchandise Inventory Equipment Accumulated Depreciation Total Assets Instructions: 3. Accounts Payable Capital Total Liabilities and Capital April P 187,500 450,000 400,000 250,000 (112,500) P 1,175,000 P 345,000 830,000 P 1,175,000 Give the entries to adjust and close the books of April. Arias P 112,500 375,000 300,000 300,000 37,500) P 1,050,000 P 250,000 800,000 P 1,050,000 67 Give the entries required on the books of Arias upon the formation of the partnership. Prepare a statement of financial position for the new partnership of April and Arion
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