Answered: Shoyo and Tobio are combining separate…

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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Question

Shoyo and Tobio are combining separate businesses to form a partnership. Cash and non-cash assets are to be contributed for a total capital of P300,000. The non-cash assets to be contributed and the liabilities to be assumed are shown below. The partner’s capital accounts are to be equal after all contribution of assets and assumption of liabilities. The total assets of the partnership is *

SHOYO
Per Books As Agreed
20,000
TOBIO
Per Books As Agreed
Accounts Receivable 20,000
Inventories
30,000
40,000
45,000
15,000
20,000
25,000
Equipment
Accounts Payable
60,000
15,000
40,000
10,000
50,000
10,000

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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