QUESTION 3 3.1 Two people are working together in a business sharing profits. Identify the business form, advantages, disadvantages and the role of each of the individuals within this business combination 3.2 Susan and Jane decided to enter into the business combination identified in 3.1. The following capital where contributed: Susan contributes R200 000 cash and equipment worth R100 000 Jane contributes R100 000 cash and a vehicle worth R300 000 REQUIRED: Record all transactions in the general ledger

QUESTION 3 3.1 Two people are working together in a business sharing profits. Identify the business form, advantages, disadvantages and the role of each of the individuals within this business combination 3.2 Susan and Jane decided to enter into the business combination identified in 3.1. The following capital where contributed: Susan contributes R200 000 cash and equipment worth R100 000 Jane contributes R100 000 cash and a vehicle worth R300 000 REQUIRED: Record all transactions in the general ledger

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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LEARNING TASK NO. 1 GENERAL INSTRUCTION: Write your solution and answer on a separate paper and put initials/signature on every final answer. Problem #1 Pedro and Jose form a partnership for the first time. Their investments are; Pedro is to invest cash amounting to P 70, 000 and Jose is to contribute Merchandise inventory at a P 10,000 cost with fair value of P 20, 000 and Computer equipment at a cost of P 50, 000 with a fair value of P 30, 000. Required: Prepare the necessary journal entries to record the investment of each partner. Problem #2 Jose has been operating a retail store for a number of years. A statement of financial position on July 1, 2021 is prepared for Jose Company as follows: Assets Cash Accounts receivable P 60, 000 50, 000 Inventory Equipment Less: Accumulated Depreciation 70, 000 P 40, 000 4. 000 36, 000 P 216, 000 Total Assets Liabilities and Equity P 86, 000 Accounts payable Jose Capital Total Liabilities and Equity 130, 000 P 216, 000 Jose needs additional…
QUESTION SIX The following trial balance has been extracted from the books of Gum and Mum as at 31 March 2021; Gum and Mum are in partnership sharing profits and losses in the ratio 3 to 2: Capital accounts: K K Gum 10,000 Mum 5,000 Cash at bank 1,550 Accounts payable 500 Current accounts:…
Chapter 2: Partnerships Exercise - 1 Computing initial partner investments Careem and Labeeb establish an equal partnership in both cquity and profits to operate a used- furniture business under the name of C&L Furniture. Careem contributes furniture inventory that cost $120,000 and has fair value of $160,000. Labceb contributes $60,000 cash and delivery cquipment that cost $80,000 and has a fair valuc of $60,000. Required: Assume that the initial noncash contributions of the partners are recorded at fair market value. A) Compute the ending balance of cach capital account under the bonus and goodwill approaches. B) Prepare the journal entries of the initial investments under both approaches.
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
Use the information to solve problem (a) completely please
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PROBLEM – 3 Dagnachew and Firdu formed a partnership. Dagnachew invested Birr 90,000 and Firdu invested Birr 60,000. Dagnachew is to devote one-half time to the business while Firdu is to devote full time. The following plans for the division of income are being considered: equally in the ratio of original investments in the ratio of time devoted to the business Interest of 12% on original investments and the reminder equally. Interest of 12% on original investments, salaries of Birr 10,000 to Dagnachew and Birr 20,000 to Firdu, and the remainder equally. The same as in #5 except that Dagnachew is also to be allowed a bonus equal to 25% of the amount by which net income exceeds salary allowances. Required: Determine the division of income to Dagnachew and Firdu under each plan assuming the partnership of Danagnachew and Firdu earned a net income of: A. Birr 32,000 B. Birr 150,000
Problem 2 - 2 (Two Sole Proprietors Form a Partnership; Books of one of the Sole Proprietors to be used by the Partnership) 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: а. Arias' inventory is to be valued at P350,000. b. An allowance for uncollectible accounts of P9,000 and P7,500, respectively should be set up. с. 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. Statements of financial position for April and Arias on October 1 before adjustments are presented below. April 187,500 450,000 Arias Cash P 112,500 375,000 300,000 300,000 ( 37,500) P1,050,000 Accounts Receivable Merchandise Inventory Equipment Accumulated Depreciation Total Assets 400,000 250,000 ( 112,500) P 1,175,000 Accounts…