Problem 8 April, May and June decided to form a partnership on January 1, 2018 to operate a retail store. April and May both owned a retail store with the following account balances: ENTIA APRIL MAY 10,000,000 Cash Receivables 15,000,000 1911 20,000,000 Inventories PPE 5,000,000 BAGUIO C20,000,000 10,000,000 Accounts Payable Notes Payable 25,000,000 15,000,000 (10%) (5%) Capital 40,000,000 15,000,000 The following are to be taken up by the partnership: b. a. April and May will contibute all their assets and liabilities in the newly formed partnership. The parties agree to provide a 10% and 20% allowance for bad debts on the receivables of April and May. e. The inventories of April and May have fair values of P30,000,000 and P22,500,000, respectively. The PPE of April and May have never been depreciated and should be depreciated by 40% and 30%, respectively. d. e. The interest payable on both notes payable were unrecorded and unpaid since the date of contract. April's note payable is dated April 1, 2017 while May's note payable is dated June 30, 2017. f. June shall have a 20% interest in the partnership upon contribution of sufficient cash. What is the amount of cash to be contributed by June on January 1, 2018?
Problem 8 April, May and June decided to form a partnership on January 1, 2018 to operate a retail store. April and May both owned a retail store with the following account balances: ENTIA APRIL MAY 10,000,000 Cash Receivables 15,000,000 1911 20,000,000 Inventories PPE 5,000,000 BAGUIO C20,000,000 10,000,000 Accounts Payable Notes Payable 25,000,000 15,000,000 (10%) (5%) Capital 40,000,000 15,000,000 The following are to be taken up by the partnership: b. a. April and May will contibute all their assets and liabilities in the newly formed partnership. The parties agree to provide a 10% and 20% allowance for bad debts on the receivables of April and May. e. The inventories of April and May have fair values of P30,000,000 and P22,500,000, respectively. The PPE of April and May have never been depreciated and should be depreciated by 40% and 30%, respectively. d. e. The interest payable on both notes payable were unrecorded and unpaid since the date of contract. April's note payable is dated April 1, 2017 while May's note payable is dated June 30, 2017. f. June shall have a 20% interest in the partnership upon contribution of sufficient cash. What is the amount of cash to be contributed by June on January 1, 2018?
Accounting
27th Edition
ISBN:9781337272094
Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Chapter12: Accounting For Partnerships And Limited Liability Companies
Section: Chapter Questions
Problem 12.4BPR
Related questions
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
Transcribed Image Text:Problem 8
April, May and June decided to form a partnership on January 1, 2018 to operate a retail store. April and
May both owned a retail store with the following account balances:
ENTIA
APRIL
MAY
10,000,000
5,000,000
Cash
Receivables
10,000,000
15,000,000
Inventories
1911
35,000,000
20,000,000
5,000,000
Accounts Payable AGUIO CX 25,000,000
10,000,000
Notes Payable
15,000,000
25,000,000
(10%)
(5%)
Capital
40,000,000
15,000,000
The following are to be taken up by the partnership:
a. April and May will contibute all their assets and liabilities in the newly formed partnership.
The parties agree to provide a 10% and 20% allowance for bad debts on the receivables of April
and May.
b.
c. The inventories of April and May have fair values of P30,000,000 and P22,500,000, respectively.
d. The PPE of April and May have never been depreciated and should be depreciated by 40% and
30%, respectively.
e.
The interest payable on both notes payable were unrecorded and unpaid since the date of contract.
April's note payable is dated April 1, 2017 while May's note payable is dated June 30, 2017.
f. June shall have a 20% interest in the partnership upon contribution of sufficient cash.
What is the amount of cash to be contributed by June on January 1, 2018?
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 2 steps with 2 images
Knowledge Booster
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
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,