The following transactions occurred in the formation of Enercon Service Makers partnership: 1. Perez made a cash investment of P500,000. 2. Tiu invested equipment costing P800,000 with a current market value of P700,000 with an outstanding mortgage of P200,000 with ABC bank. The partnership will assume the mortgage. 3. Ruiz will be admitted as the manager with 20% share in the profit. 4. The partnership earned service fee of P400,000 and paid operating expenses totaling P150,000. 5. Perez and Tiu withdrew P 20,000 each while Ruiz was paid salary of P30,000. Required: a. Prepare journal entries to record the above transactions b. Prepare the Statement of Partners' Equity; the Net Income is to be divided as follows: 20% to Ruiz and the Balance divided equally between Perez & Tiu.
The following transactions occurred in the formation of Enercon Service Makers partnership: 1. Perez made a cash investment of P500,000. 2. Tiu invested equipment costing P800,000 with a current market value of P700,000 with an outstanding mortgage of P200,000 with ABC bank. The partnership will assume the mortgage. 3. Ruiz will be admitted as the manager with 20% share in the profit. 4. The partnership earned service fee of P400,000 and paid operating expenses totaling P150,000. 5. Perez and Tiu withdrew P 20,000 each while Ruiz was paid salary of P30,000. Required: a. Prepare journal entries to record the above transactions b. Prepare the Statement of Partners' Equity; the Net Income is to be divided as follows: 20% to Ruiz and the Balance divided equally between Perez & Tiu.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
NOTE: PLEASE PUT IT ON EXCEL THANK YOU
Transcribed Image Text:The following transactions occurred in the formation of Enercon
Service Makers partnership:
1. Perez made a cash investment of P500,000.
2. Tiu invested equipment costing P800,000 with a current
market value of P700,000 with an outstanding mortgage of
P200,000 with ABC bank. The partnership will assume the
mortgage.
3. Ruiz will be admitted as the manager with 20% share in the
profit.
4. The partnership earned service fee of P400,000 and paid
operating expenses totaling P150,000.
5. Perez and Tiu withdrew P 20,000 each while Ruiz was paid
salary of P30,000.
Required:
a. Prepare journal entries to record the above transactions
b. Prepare the Statement of Partners' Equity; the Net Income is
to be divided as follows: 20% to Ruiz and the Balance divided
equally between Perez & Tiu.
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 3 steps
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 Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education