The statement of financial position of the partnership of A and B as of December 31, 20x1 isshown below:Cash33,354Accounts receivable802,426InventoryLand380,137603,000BuildingEquipment428,26785,134Other assets5,600Total assets2,337,918Accounts payableNotes payable422,590545,000641,976A, capitalB, capitalTotal liabilities and equity728,3522,337,918• A and B share in profits and losses equally.• On January 1, 20x2, C informed A and B of his intention to invest in the partnership for a 20%interest. The partners agreed on the following adjustments prior to C's admission:o Accounts receivable of P55,000 should be written-off.o Inventories of P12,200 are obsolete and have no resale value.o The 'Other assets' should be written off.If no bonus is allowed, how much is C's required investment?234,167236,347324,382341,367

A's capital 641976 B's Capital 728352

Answered: The statement of financial position of…

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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The condensed Balance Sheet of the XY partnership on December 31, 2024, appears below. $ 60,000 $ 60,000 200,000 90,000 110,000 $260.000 Cash Other Assets Total Assets Liabilities X, Capital Y, Capital Total Liabilities and Capital $260.000 X and Y share profits and losses in the ratio 40:60. Each of the following questions is independent of the others. Prepare journal entries for each of the following: Show all computations. a. Refer to the above information. Assume that Z purchases a one-fourth of Y's capital interest directly from Y for a total of $60,000. (Direct purchase) Compute each partner's balance after Z is admitted. b. Refer to the above information. Assume Z invests $60,000 cash into the XY partnership for a one-fourth interest in partnership capital and profits. (Bonus method) Compute each partner's balance after Z is admitted.
. The GHK partnership has the following balance sheet: Cash $ 30,000 Other assets $170,000 Recourse liabilities $ 50,000 Capital – G $ 50,000 Capital – H $ 50,000 Capital – K $ 50,000 Partnership profits are allocated equally. Losses are allocated 50% to G, 25% to H, and 25% to K. The partnership agreement has a capital account deficit restoration requirement. How should the recourse liability be allocated?
Item Nos. 17 and 18 are based on the following information: The balance sheet for the partnership of Lia, Mia, and Pia, who share profits in the ratio of 2:1:1, respectively, shows the following balances just before liquidation: Cash P 12,000 Liabilities P 20,000 Noncash Assets- 59,500 Lia Capital --- 22,000 Mia Capital 15,500 Pia Capital--- 14,000 P 71,500 P 71,500 On the first month of liquidation, certain assets were sold for P 32,000. Liquidation expenses of P 1,000 were paid and additional liquidation expenses in the future are still anticipated. Liabilities were paid amounting to P 5,400 and sufficient cash was retained to ensure the payment to creditors before making payments to the partners. On the first payment to partners, Lia received P 6,250. 17. The total cash distributed to the partners in the first installment was: a. P 12,500. C. P 25,000. b. P 20,000. d. P 37,600. 18. The amount of cash withheld for anticipated liquidation expenses and unpaid liabilities was: a. P…
1. On January 1, 20X2, partners A, B and C, who share profits and losses in the ratio of 5:3:2, respectively, decided to liquidate their partnership. The partnership trial balance at this date is as follows: Credit Cash Accounts Receivable Inventory Machinery and Equipment, net A, Loan ● Accounts Payable B, Loan A, Capital B, Capital C, Capital Totals Debit 18,000 66,000 52,000 189,000 30,000 53,000 20,000 118,000 90,000 74,000 355,000 355,000 The partners plan a program of piecemeal conversion of assets in order to minimize liquidation losses. All available cash, less an amount retained to provide for future expenses, is to be distributed to the partners at the end of each month. The following liquidation transactions occurred in January 20X2. P51,000 was collected on accounts receivable; the balance in uncollectible. ● $48,000 was received for the entire inventory. $2,000 liquidation expenses were paid. P50,000 was paid to outside creditors, after offset of a P3,000 credit memorandum…
Ashvinbhai
Following is a balance sheet for the partnership business of Amy, Lucy, and John: Assets Amount ($) Liabilities & Equity Amount ($) Cash 50,000 A/P 10,000 Inventory 45,000 N/P 50,000 Land 60,000 Building 230,000 Acc. Dep. 60,000 170,000 Amy's Capital Lucy's Capital John's Capital 130,000 80,000 55,000 Total 325,000 Total 325,000 The profit and loss sharing ratio between Amy, Lucy, and John was 2:1:1 respectively. Suppose John is retiring during the year. The appraisal of assets shows that current market value of inventory is $35000, while land valued at $92000. Required: Record the journal entries for appraisal of assets and John's retirement if he received $35000 in cash and a note payable of $55000. do not give answer in image format
C. The partnership accounts of Guess, Jag and Levis are shown below as of December 31, 2019. Profits and losses are shared 50%; 30%; and 20%, respectively. Guess, Drawing (debit balance) P (32,000) Levis, Drawing (debit balance) (12,000) Jag, Loan 40,000 Guess, Capital 164,000 Jag, Capital 134,000 Levis, Capital 144,000 Total assets amounted to P 638,000, including cash of P 70,000, and P 200,000 worth of liabilities. On January 2019, the partnership was liquidated, and Jag received P 111,000 cash as final settlement. Required: 1. The total loss from the liquidation of the partnership 2. Prepare the statement of liquidation. 3. Journal entries to record the liquidation.
Use the following information for numbers 29 and 30. On June 30, 2018, the balance sheet for the partnership of D, E and F, together with their respective profit and loss ratios, is summarized as follows: Assets 300,000 D, Loan 15,000 D, Capital (20%) 70,000 E, Capital (20%) F, Capital (60%) Total Liabilit ies and Capital 65,000 150,000 Total Assets 300,000 300,000 D has decided to retire from the partnership, and by mutual agreement the assets are to be adjusted to their fair values of P260,000 at June 30, 2018. It is agreed that the partnership will pay D, P102,000 cash for his interest exclusive of his loan which is to be repaid in full. After D's retirement, what are the capital balances of each partner? 29. Partner E. 30. Partner F.
The LM partnership will take over the assets and assume the liabilities of the proprietor as of January 1, 20x4 Determine the total assets after the formation of the partnership.
Adam and Boru are partners sharing profit and loss in the ratio of 1:1. Their Statement of Financial Position(Balance Sheet) stood as at 31.12.2020 as follows: A and B Partnership Statement of Financial Position As at 31st December 2020 ASSETS 2020 Current Assets Kshs'000 Kshs'000 Cash and Cash Equivalent 43,500 Short Term Deposits - Prepaid Insurance 1,000 Debtors 20,500 Less Provision for Doubtful Debts (1,000) 19,500 Inventories 30,000 94,000 Non Current Assets Machinery 22,000 Less:Accumulated Depreciation - 22,000 Buildings 30,000 Less:Accumulated Depreciation - 30,000…
The following is the trail Balance of X and Y Co. as on March 31, 2021. The partners sharing profits and losses in the ratio 2:1. Prepare the Income Statement, Profit & Loss Appropriation A/c, Partners' Capital A/c and the Balance Sheet. Particulars Dr. Particulars Cr. 375000 x Capital A/c 112500 Y Capital A/c 50000 Sundry creditors 100000 Sales (net) 50000 Discount Land and Buildings Plant and Machinery 125000 75000 Wages 62500 Opening Stock of Finished Goods 812500 Opening Stock of Raw material Opening Stock of Work in Progress Sundry debtors 6250 45000 Provision for bad debts 3750 125000 Commission 3750 Y's Loan A/c 2250 25000 Carriage inwards 75000 Carriage outwards Factory Expenses 18750 Royalties 3750 Purchase of Raw material (net) 187500 16250 7250 10000 Factory rent & taxes Discount Office rent Insurance 5000 3750 18750 30000 20500 1185000 The following additional information is to be taken into consideration: Bad debts Office Expenses Salaries of works manager Cash at bank…
Exercise 3-2 (Division of Profit; Interest on Average Capital) Danica and Jenson are partners. Their capital accounts during the fiscal year 2019 were as follows: Danica, Capital 120,000 1/1 Jenson, Capital 3/1 180,000 1/n 1,200,000 140,000 100,000 9/1 800,000 160,000 60,000 4/1 7/1 11/1 10/1 Profit of the partnership is P250,000 for the year. Determine the partners shared profit under the following assumptions: 1. Each partner is to be credited 12% interest on his average capital. 2. Any remaining profit or loss is to be divided equally.

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