Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

A business owned by Kagura was short of cash and Kagura decided to form a partnership with Gusion who was able to contribute cash twice

A business owned by Kagura was short of cash and Kagura decided to form a partnership with Gusion who was able to contribute cash twice the interest of Kagura in the new partnership. The assets contributed by Kagura appears as follows in the statement of financial position of his business: cash, P9,000; accounts receivable, P189,000 with allowance for uncollectible accounts of P6,000; merchandise inventory, P420,000; and store equipment, P150,000 with accumulated depreciation of P15,000.

Kagura and Gusion agreed that the allowance for uncollectible accounts was inadequate and should be P10,000. They also agreed that the fair value for the inventory is P460,000 and for the store equipment is P140,000.

Required:

  1. Journal entry for the adjustments and investments
  2. What is the total capital of Kagura and Gusion?

Step by Step Solution

3.39 Rating (168 Votes )

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Accounting Principles Part 3

Authors: Jerry J. Weygandt, Donald E. Kieso, Paul D. Kimmel, Barbara Trenholm, Valerie Kinnear, Joan E. Barlow

6th Canadian edition Volume 1

1118306805, 978-1118306802

More Books

Students also viewed these Accounting questions

Question

Why should a business be socially responsible?

Answered: 1 week ago

Question

Discuss the general principles of management given by Henri Fayol

Answered: 1 week ago

Question

Detailed note on the contributions of F.W.Taylor

Answered: 1 week ago