Problem #2 (Adapted) In a high school reunion, Tres met former classmate Uno and Dos. He learned that the two partners in a business of buying and selling general merchandise. While the business is profitable, it encounters occasional cash shortages due to growing investments in inventories and receivables. Tres was then invited to join the partnership of Uno and Dos by making a cash investment. At the time of his entry, the capital balances of Uno and Dos amounted to P40,000 and P200,000, respectively. They share profit and loss in the ratio of 6:4. Required: A. Prepare the journal entry to record the admission of Tres assuming: 1. He invested P300,000 for 1/3 interest in the partnership. 2. He invested P200,000 for a 20% interest in the partnership. 3. He invested P400,000 for a 50% interest in the partnership.
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- Please create the journals and balance sheet and using correct chart of accounts and labels and amount descriptions. Only answer using what i have provided. On March 1, 20Y8, Eric Keene and Renee Wallace form a partnership. Keene agrees to invest $20,900 in cash and merchandise inventory valued at $55,950. Wallace invests certain business assets at valuations agreed upon, transfers business liabilities, and contributes sufficient cash to bring her total capital to $60,390. Details regarding the book values of the business assets and liabilities, and the agreed valuations, follow: Wallace’s Ledger Agreed-Upon Balance Valuation Accounts Receivable $19,370 $18,480 Allowance for Doubtful Accounts 1,240 1,520 Equipment 83,050 54,330 Accumulated Depreciation 29,920 – Accounts Payable 14,980 14,980 Notes Payable (current) 35,860 35,860 The partnership agreement includes the following provisions regarding the division of net income: interest on original…A business owned by Mr. Handa was short of cash and decided to form a partnership with Ms. Kanaba, who was able to contribute cash twice the interest of Mr. Handa in the new partnership. The assets contributed by Mr. Handa appeared in the financial reports as follows: cash, P9,000; accounts receivable, P189,000 with allowance for bad debts of P6,000; merchandise inventory, P420,000; and store equipment, P150,000 with accumulated depreciation of P15,000 Mr. Handa and Ms. Kanaba agreed that the allowance for uncollectible accounts was inadequate and should be increased by P12,000. They also agreed that the fair value for the inventory is P460,000 and for the store equipment is P140,000. How much is the cash contributed by Ms. Kanaba into the partnership? The correct answer should be 1,560,000. Please make a solution, Thanks.Three investors wish to start a manufacturing business. The business is expected to generate a large income which it will reinvest for many years. Investor #1 has substantial assets which he plans to contribute to the business. Investor #1 is also concenred about showing too much business income on his personal return. Which business structure(s) would be most appropriate for the business? 1. A limited partnership with Investor #1 as the limited partner. 2. A business trust with all three as equal partners. 3. An S corporation with all three as equal shareholders. 4. AC corporation with all three as shareholders
- Alyssa who is currently operating a machine shop is considering Dindin, an excellent employee, to be her partner. Unfortunately, Dindin could not afford to invest cash of P 500,000 which Alyssa needs to expand her business. As consultant, you asked Alyssa to answer some questions before giving an advice on whether Dindin should be taken in as partner. Details : 1.What is your present annual net income? P 450,000 2. Can you avail of a loan of P 500,000? Yes 3. What bank and what is the interest rate? Land Bank @ 17% 4. With the new equipment, how much additional income will it generate? P 450,000 5. In how many year are you going to pay the loan? 5 years 6. How much are you willing to pay Dindin as salary or profit? P 160,000 next is what are the answers of the following questions? Net income with the new equipment Less (Minus) interest charge on loan liability Net income after the interest charge Less (Minus) share of Dindin in the profits Share…A business owned by Cristiano Ronaldo was short of cash and Ronaldo therefore decided to form a Partnership with Lionel Messi, who was able to contribute cash to the new partnership. The assets contributed by Ronaldo appeared as follows in the balance sheet of her business: cash $600: account receivable, $34900, with an allowance for doubtful accounts of $960: inventory $45600: and store equipment, $21600. Ronaldo had recorded depreciation of $1800 during his use of the store equipment in his sole proprietorship. Ronaldo and Messi agreed that the allowance for Doubtful accounts was inadequate and should be $1800.They also agreed that a fair value for the inventory was its replacement cost of $54000 and that the fair value of the store equipment was $19000.You are required to open the partnership accounts by making a general journal entry to record the investment by Ronaldo?T. Thomas withdraws from his partnership with five other partners and takes cash equal to his capital balance, in the amount of $25,000. The journal entry to reflect this transaction would include which of the following? (Check all that apply.) Multiple select question. Credit to Cash Debit to T. Thomas, Capital Credit to T. Thomas, Capital Debit to Cash
- The CAB Partnership,although operating profitably, has had a cash flow problem. Unable to meet its current commitments, the firm borrowed $34,000 from a bank giving a long-term note. During a recent meeting, the partners decided to obtain additional cash by admitting a new partner to the firm. They feel that the firm is an attractive investment, but that proper management of their liquid assets will be required. Meyers agrees to invest cash in the firm if her chief accountant can review the accounting records of the partnership. The balance sheet for CAB Partnership as of December 31, 2008, is as follows: Assets Cash...............$ 8,000 Accounts Receivable........33,600 Inventory (at cost) ........35,750 Land..............27,000 Building (net of depreciation)....41,600 Equipment (net of depreciation) ...27,250 Total..............$173,200 Liabilities and Capital Accounts Payable...........$ 32,450 Other Current Liabilities........6,750 Long-Term Note (8% due 2008) ..34,000 Cox,…Alyssa who is currently operating a machine shop is considering Dindin, an excellent employee, to be her partner. Unfortunately, Dindin could not afford to invest cash of P 500,000 which Alyssa needs to expand her business. As consultant, you asked Alyssa to answer some questions before giving an advice on whether Dindin should be taken in as partner. What is your present annual net income? P 450,000 Can you avail of a loan of P 500,000? Yes What bank and what is the interest rate? Land Bank @ 17% With the new equipment, how much additional income will it generate? P 450,000 In how many year are you going to pay the loan? 5 years How much are you willing to pay Dindin as salary or profit? P 160,000 You drafted the following information and filed it up: Net income…Scenario: Hart Nance and Jason Symington operate gift boutiques in shopping malls. The partners split profits and losses equally, and each takes an annual drawing of $80,000. To even out the workload, Nance travels around the country inspecting their properties. Symington manages the business and serves as the accountant. From time to time, they use small amounts of store merchandise for personal use. In preparing for his daughter's wedding, Symington took inventory that cost $10,000. He recorded the transactions as follows: Debit Credit Cost of Goods Sold $10,000 Inventory $10,000 Respond to the following questions and, if appropriate, include personal experience as part of your answers. • How do you feel Symington should have recorded these transactions? Why? • What are the ethical implications of Symington's actions?
- Alyssa who is currently operating a machine shop is considering Dindin, an excellent employee, to be her partner. Unfortunately, Dindin could not afford to invest cash of P 500,000 which Alyssa needs to expand her business. As consultant, you asked Alyssa to answer some questions before giving an advice on whether Dindin should be taken in as partner. What is your present annual net income? Can you avail of a loan of P 500,000? P 450,000 Yes Land Bank @ 17% P 450,000 What bank and what is the interest rate? With the new equipment, how much additional income will it generate? In how many year are you going to pay the loan? How much are you willing to pay Dindin as salary or profit? 5 years P 160,000 You drafted the following informatic and filed it up: Net income with the new equipment Less (Minus) interest charge on loan liability Net income after the interest charge Less (Minus) share of Dindin in the profits Share of Alyssa in the net income Net income the business is currently…A business owned by Mel Madrigal was short of cash and she decided to form a partnership with Gel Panganiban, who was able to contribute cash twice (2x) the interest of Mel in the new partnership. The assets contributed by Mel appeared as follows in the balance sheet of her business: Cash, P4,500; Accounts Receivable P94,500; Allowance for doubtful accounts of P3,000; Inventory P210,0003; Store equipment P75,000 with an accumulated depreciation of P7,500. Mel and Gel agreed that the allowance for doubtful accounts was inadequate and should be P5,000. They also equipment. The cash contributed by Gel into the partnership was greed that the fair value for the inventory is P230,000 and P60,000 for the storeA business owned by Mel Madrigal was short of cash and she decided to form a partnership with Gel Panganiban, who was able to contribute cash twice (2x) the interest of Mel in the new partnership. The assets contributed by Mel appeared as follows in the balance sheet of her business: Cash, P4,500; Accounts Receivable P94,500; Allowance for doubtful accounts of P3,000; Inventory P210,000; Store equipment P75,000 with an accumulated depreciation of P7,500. Mel and Gel agreed that the allowance for doubtful accounts was inadequate and should be P5,000. They also agreed that the fair value for the inventory is P230,000 and P60,000 for the store equipment. What is the cash contributed by Gel into the partnership was ? what is the amount?