Chapter 13- 3 and 4

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13-24 | Basic Financial Accounting and Reporting by Prof. WIN Ballada NAME: SCORE: NAME: Partnerships: Operations and Financial Reporting | 13-25 SECTION: PROFESSOR: SECTION: SCORE: Problem #1 Problem #2 PROFESSOR: Formation and Operations of a Partnership On June 30, San Mateo and Caballes formed a partnership. The partners agreed to Distribution of Profits or Losses Based on Partners' Agreement invest equal amounts of capital. San Mateo invested his proprietorship's assets and liabilities as follows: Ables and Galang divide partnership profits and losses solely on the basis of their average capital balances. Ables had P275,000 invested during all of 2019; Galang had San Mateo's P200,000 invested from January 1 to August 31, and he invested another P75,000 on Fair Market receive? September 1. If profit was P800,000 during 2019, how much should each partner Book Value Value Ables 275,000 12/ 12 = 275, 000 Accounts Receivable P 72,000 P 72,000 Allowance for Uncollectible Accounts -0- 10,500 Galang 200,060 Merchandise Inventory 223,400 241,000 8 / 12 = 133 , 333 . 33 Prepaid Expenses 17,000 17,000 459,000 276,000 275,006 4/12 = 9:19 6 6 6-67 Office Equipment Accumulated Depreciation 153,000 -0- 2 25, 000 Accounts Payable 191,000 191,000 On June 30, Caballes invested cash in an amount equal to the current market value of TACB 5003000 San Mateo's partnership capital. San Mateo, the managing partner, would earn two- thirds of partnership profits. Caballes agreed to accept one-third of the profits. Ables SOOT x 275T / FOOT . = 440, 000 During the remainder of the year, the partnership earned P450,000. The temporary withdrawals of San Mateo and Caballes were P352,000 and P230,000, respectively. Galang 8007 x 225, 060, /50 07 = 360,000 Required: 800, 000 1. Journalize the partners' initial investments in a new set of books. 2. Prepare the partnership's statement of financial position immediately after its Income cummory 800T formation on June 30. Ables , capital 440T. 3. Journalize the entries to close the income summary and the drawing accounts. Galong, capital 3607 To record the division of profits