Tom and Julie formed a management consulting partnership on January 1, 20x4, the fair value of the net assets invested by each partner follows: Cash Accounts receivable Office supplies Office equipment Land Accounts payable Mortgage payable Tom 13,000.00 8,000.00 2,000.00 30,000.00 2,000.00 Julie 12,000.00 6,000.00 800.00 30,000.00 5,000.00 18,800.00 During the year, Tom withdrew P15,000.00 and Julie withdrew P12,000.00 in anticipation of operating profits. Net profit for 20x4 was P50,000.00 which is to be allocated based on the original capital investment REQUIRED: A. Prepare journal entries to (1) record the initial investment in the partnership, (b) record the withdrawals, and (c) close the income summary and drawing accounts B. Prepare a statement of changes in partners capital for the year ended December 31, 20x4

Tom and Julie formed a management consulting partnership on January 1, 20x4, the fair value of the net assets invested by each partner follows: Cash Accounts receivable Office supplies Office equipment Land Accounts payable Mortgage payable Tom 13,000.00 8,000.00 2,000.00 30,000.00 2,000.00 Julie 12,000.00 6,000.00 800.00 30,000.00 5,000.00 18,800.00 During the year, Tom withdrew P15,000.00 and Julie withdrew P12,000.00 in anticipation of operating profits. Net profit for 20x4 was P50,000.00 which is to be allocated based on the original capital investment REQUIRED: A. Prepare journal entries to (1) record the initial investment in the partnership, (b) record the withdrawals, and (c) close the income summary and drawing accounts B. Prepare a statement of changes in partners capital for the year ended December 31, 20x4

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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