Myaccountinglab With Pearson Etext -- Access Card -- For Horngren's Accounting, The Managerial Chapters
12th Edition
ISBN: 9780134490663
Author: MILLER-NOBLES, Tracie L., Mattison, Brenda L., Matsumura, Ella Mae
Publisher: PEARSON
expand_more
expand_more
format_list_bulleted
Videos
Textbook Question
Chapter 12, Problem P12.23APGA
Determining characteristics of a
Learning Objectives 1, 2 3. Accounts Payable $25,000 CR
Stone and Thombs are forming a partnership, Salem Leather Goods, to import merchandise from Spain. Stone is especially artistic and will travel to Spain to buy the merchandise. Thombs is a super salesman and has already lined up several department stores to sell the leather goods.
Requirements
1. What is the purpose of the partnership agreement?
2. If the partnership agreement does not state the profit-and-loss-sharing ratios, how will profits or losses be shared?
3. Stone is contributing $175,000 in cash and accounts payable of $25,000. Thombs is contributing a building that cost Thombs $65,000. The building’s current market value is $90,000. Journalize the contribution of the two partners.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
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 1
Kumaresan and Cheng are watch repairmen who want to form a partnership and open a jewellery store. An attorney prepares their partnership agreement, which indicates that assets invested in the partnership will be recorded at their fair market value and that liabilities will be assumed at book value.
The assets contributed by each partner and the liabilities assumed by the partnership are as the following:
Assets
Kumaresan
Cheng
Total
Cash
40,000
30,000
70,000
Accounts receivable
52,000
20,000
72,000
Allowance for uncollectable receivable accounts
4,000
3,000
7,000
Supplies
1,000
500
1,500
Equipment
20,000
10,000
30,000
Liabilities
Accounts payable
32,000
9,000
41,000
Prepare the journal entries necessary to record the original investments of Kumaresan and Cheng in the partnership.
Use the information to solve problem (a) completely please
Chapter 12 Solutions
Myaccountinglab With Pearson Etext -- Access Card -- For Horngren's Accounting, The Managerial Chapters
Ch. 12 - Prob. 1QCCh. 12 - Prob. 2QCCh. 12 - Prob. 3QCCh. 12 - Which financial statement shows the changes in...Ch. 12 - Prob. 5QCCh. 12 - Prob. 6QCCh. 12 - Prob. 7QCCh. 12 - Peter and Steve admit Meredith to their...Ch. 12 - Prob. 9QCCh. 12 - Prob. 10QC
Ch. 12 - Prob. 1RQCh. 12 - Prob. 2RQCh. 12 - Prob. 3RQCh. 12 - Prob. 4RQCh. 12 - Prob. 5RQCh. 12 - Prob. 6RQCh. 12 - Prob. 7RQCh. 12 - Prob. 8RQCh. 12 - Prob. 9RQCh. 12 - Prob. 10RQCh. 12 - Prob. 11RQCh. 12 - Prob. 12RQCh. 12 - Prob. 13RQCh. 12 - Prob. 14RQCh. 12 - Prob. 15RQCh. 12 - What are the three steps involved in liquidation...Ch. 12 - Prob. 17RQCh. 12 - Prob. S12.1SECh. 12 - Prob. S12.2SECh. 12 - Prob. S12.3SECh. 12 - Prob. S12.4SECh. 12 - Prob. S12.5SECh. 12 - S12-6 Accounting for the admission of a new...Ch. 12 - Accounting for the admission of a new partner...Ch. 12 - Prob. S12.8SECh. 12 - Prob. S12.9SECh. 12 - Prob. S12.10SECh. 12 - Prob. S12.11SECh. 12 - Prob. S12.12SECh. 12 - Prob. E12.13ECh. 12 - Prob. E12.14ECh. 12 - Prob. E12.15ECh. 12 - Prob. E12.16ECh. 12 - Prob. E12.17ECh. 12 - Prob. E12.18ECh. 12 - Prob. E12.19ECh. 12 - Prob. E12.20ECh. 12 - Prob. E12.21ECh. 12 - Prob. E12.22ECh. 12 - Determining characteristics of a partnership and...Ch. 12 - Prob. P12.24APGACh. 12 - Prob. P12.25APGACh. 12 - Prob. P12.26APGACh. 12 - Prob. P12.27APGACh. 12 - Prob. P12.28APGACh. 12 - Prob. P12.29APGACh. 12 - Prob. P12.30APGACh. 12 - Prob. P12.31BPGBCh. 12 - Prob. P12.32BPGBCh. 12 - Prob. P12.33BPGBCh. 12 - Prob. P12.34BPGBCh. 12 - Prob. P12.35BPGBCh. 12 - Accounting for the liquidation of a partnership...Ch. 12 - Prob. P12.37BPGBCh. 12 - Prob. P12.38BPGBCh. 12 - Prob. P12.39CTCh. 12 - P12-40 Accounting for partner contributions,...Ch. 12 - Prob. 12.1TIATCCh. 12 - Prob. 12.1DCCh. 12 - Prob. 12.2DCCh. 12 - Prob. 12.1EICh. 12 - Prob. 12.1FSC
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.Similar questions
- Task 2: X and Y share income of their partnership in a 2:3 ratio. X and Y receive salaries of $18,000 and $12,000, respectively. a) How would they share a net income of $30,000 (before salaries are distributed)? b) You should make the journal entry for this activity. c) In which ways will the results in a) and b) be changed if the ratio is 1:4?arrow_forwardhelp please answer in text form with proper workings and explanation for each and every part and steps with concept and introduction no AI no copy paste remember answer must be in proper format with all workingarrow_forward1 1 . NAME: SECTION: Partnerships: Basic Considerations and Formation 465 Problem #3 A Sole Proprietor and an Individual with No Business Form a Partnership SCORE: PROFESSOR: Espanol operated a specialty shop that sold fishing equipment and accessories. Her post-closing trial balance on Dec. 31, 2022 is as follows: Accounts Payable Espanol, Capital Cash Accounts Receivable Allowance for Uncollectible Accounts Inventory Equipment Accumulated Depreciation Fish Post-Closing Trial Balance Dec. 31, 2022 Debit P 36,000 150,000 440,000 135,000 P761,000 Credit P 16,000 75,000 30,000 640,000 P761,000 Espanol plans to enter into a partnership with trusted associate, Selisana, effective Jan. 1, 2023. Profits or losses will be shared equally., Espanol is to transfer all assets and liabilities of her shop to the partnership after revaluation. Selisana will invest cash equal to Espanol's investment after revaluation. The agreed values are as follows: accounts receivable (net), P140,000; inventory,…arrow_forward
- Q8 ABC Bakers is a partnership concern owned and operated by Mr. X and Mr. Y. Identify the option that reflect the correct treatment of accounting transaction in the books of ABC Bakers? Select one: a. Mr. X borrowed Mr. Y money from a partnership’s bank account to buy a car for personal use: Debit vehicle; Credit Bank b. Mr. Y purchased an oven for the bakery using his personal credit card: Debit Oven (Asset); Credit Equity Capital c. Mr. X paid his house rent from the business bank account. Debit Rent expense; Credit Bank B d. Mr. Y paid out of buarrow_forwardSolve the problem correctly.arrow_forwardGibbs and Reed Partnership owns merchandise that was purchased for $109,00o. The merchandise has a current replacement cost of $90,500, and is priced to sell for $127,000. Gibbs and Reed are admitting a new partner, Jay. At what amount should the merchandise be recorded in the accounts of the new partnership if Jay is to be admitted to the partnership? a. $127,100 b. $109,000 c. $90,500 d. $127,000 e. None of the above.arrow_forward
- Instruction: Prepare the answers and solutions in written form using a clean paper (e.g. Yellow pod, bond paper, notebook etc.) and submit a snapshot in CANVAS. The balance sheet of A on November 30, 2020 before accepting B as his partner to form AB Partnership is presented below: Assets: Cash 120,000 Accounts receivable 48,000 Less: Allowance for uncollectible accounts 3.000 45,000 Notes receivable 60,000 Merchandise inventory 27,000 Equipment 72,000 Less: Accumulated Depreciation 6,000 56,000 Total assets 318,000 Liabilities and Capital Accounts payable 12,000 Notes payable 60,000 A, Capital 246,000 Total liabilities and capital 318,000 It is agreed that for the purpose of establishing A's interest the following adjustments shall be made: a. The accounts receivable is estimated to be 90% realizable. b. Interest at 8% of notes receivable dated March 1, 2019 is to be accrued. c. Merchandise inventory is to be valued at P21,000. d. The equipment is under-depreciated by P4,800. e.…arrow_forwardPartnership Operation and Distribution of profit/loss 1. Jay, a businessman, invited two friends to join him in a business venture. He is willing toinvest his business and asked his two friends what their contributions will be. Michael, a balikbayan,would like to invest cash, but doubts he could actively participate in its management since he is inthe Philippines only for a vacation. Nevertheless, he is eager to join the partnership with thecondition that since he cannot actively participate he should be liable only to the extent of what heinvested. Angelo must join the business since his expertise is needed for the type of venture Jay iscontemplating to put up but does not want to make any capital contribution. QUESTION : Jay gives you four alternative methods of dividing profits. Which do you think would be bestfor the partners? Why?a. Based on their contributions ratiob. Salaries to Angelo and Jay with the remainder, if any, based on their contributions ratioc. Salaries to Angelo…arrow_forwardPartnership Operation and Distribution of profit/loss 1. Jay, a businessman, invited two friends to join him in a business venture. He is willing toinvest his business and asked his two friends what their contributions will be. Michael, a balikbayan,would like to invest cash, but doubts he could actively participate in its management since he is inthe Philippines only for a vacation. Nevertheless, he is eager to join the partnership with thecondition that since he cannot actively participate he should be liable only to the extent of what heinvested. Angelo must join the business since his expertise is needed for the type of venture Jay iscontemplating to put up but does not want to make any capital contribution. QUESTION : Is it possible for the three friends to put up the business? Identify the roles they will play.arrow_forward
- Required information Important Notel Before you start working on this problem, watch the Hint video. This video shows you exactly how to work this problem. The following information applies to the questions displayed below] 5 Ramer and Knox began a partnership by investing $68,000 and $102,000, respectively. During its first year, the partnership earned $205,000. Prepare calculations showing how the $205,000 income is allocated under each separate plan for sharing income and loss. O Important Note! Before you start working on this problem, watch the Hint video. This video shows you exactly how to work this problem. 2. The partners agreed to share income and loss in proportion to their initial investments. Net Income is $205,000. (Do not round Intermediate calculations.) A $68.000/5170 000 Fraction to Allocate Ramers Share Fraction to Allocate Knox's Share of Total Income Allocated Show Transcribed Text Iarrow_forwardPlease help mearrow_forwardProblem I Ariel, Beauty and Cindy decided to form Disprin Partnership with 2:2:1 profit sharing. Both Ariel and Beauty have existing business. The balance sheet of the two are shown below together with their agreement prior to formation. Ariel Beauty Cash 117 126 Account receivables 100 200 Inventories 50 30 Equipment 80 0 Furniture 0 30 Prepayments 5 15 Total 352 401 Accounts payable 75 95 Capital 277 306 Total 352 401 Partners' agreements: Receivables are 97% collectible Ariel's inventories fair values is at P55 while P10 of Beauty's Inventories were damaged and are only 30%…arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Financial Accounting: The Impact on Decision Make...AccountingISBN:9781305654174Author:Gary A. Porter, Curtis L. NortonPublisher:Cengage Learning
Managerial AccountingAccountingISBN:9781337912020Author:Carl Warren, Ph.d. Cma William B. TaylerPublisher:South-Western College Pub
Financial And Managerial AccountingAccountingISBN:9781337902663Author:WARREN, Carl S.Publisher:Cengage Learning,
College Accounting, Chapters 1-27AccountingISBN:9781337794756Author:HEINTZ, James A.Publisher:Cengage Learning,
Financial Accounting: The Impact on Decision Make...
Accounting
ISBN:9781305654174
Author:Gary A. Porter, Curtis L. Norton
Publisher:Cengage Learning
Managerial Accounting
Accounting
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:South-Western College Pub
Financial And Managerial Accounting
Accounting
ISBN:9781337902663
Author:WARREN, Carl S.
Publisher:Cengage Learning,
College Accounting, Chapters 1-27
Accounting
ISBN:9781337794756
Author:HEINTZ, James A.
Publisher:Cengage Learning,
Operating Loss Carryback and Carryforward; Author: SuperfastCPA;https://www.youtube.com/watch?v=XiYhgzSGDAk;License: Standard Youtube License