Question
Problem 1 Sabo, as her original investment in the firm of Sabo and Ace, contributed equipment that had been recorded in the books of her
Problem 1 Sabo, as her original investment in the firm of Sabo and Ace, contributed equipment that had been recorded in the books of her own business as costing P900,000, with accumulated depreciation of P620,000. The partners agreed on a valuation of P400,000. They also agreed to accept Sabos accounts receivable of P360,000, realizable to the extent of 85%. Required: Prepare the journal entry to record Sabos investment in the partnership on June.
Problem 2 Gord and Valir have just formed a partnership. Gord contributed cash of P 1,260,000 and computer equipment that cost P540,000. The fair value of the computer is P360,000. Gord has notes payable on the computer of P 120,000 to be assumed by the partnership. Gord is to have 60% capital interest in the partnership. Valir contributed only P900,000. The partners agreed to share profit and loss equally. Required:
1. How much investment(withdrawal) should Gord make?
2. Prepare the balance sheet of the new partnership.
Problem 3 On Apr, 8, 2018, Tik who has her own retail business and Tok, decided to form a partnership wherein they will divide profits in the ratio of 40:60, respectively, the statement of financial position of Tik is as follows: Conditions agreed upon before the formation of the partnership:
a. The accounts receivable of Tik is estimated to be 70% realizable.
b. The accumulated depreciation of the equipment will be increased by P 10,000.
c. The accounts payable will be assumed by the partnership.
d. The capital of the partnership is based on the adjusted capital balance of Tik.
Tok is to contribute cash in order to make the partners capital balances proportionate to the profit and loss ratio. Required:
1. Prepare the necessary journal entries in the books of Tik.
2. Prepare the opening journal entries in the books of the partnership.
3. Prepare the statement of financial position of the newly formed partnership.
Tik Marketing Statement of Financial Position April 8, 2018 Assets Cash P 4,000 Accounts Receivable P 160,000 Less: Allowance for Uncollectible Accounts 16,000 144,000 Inventory 200,000 Equipment 50,000 Less: Accumulated Depreciation 10,000 40,000 Total Assets P 388,000 Liabilities and Capital Accounts Payable P 36,000 Tik, Capital 352,000 Total Liabilities and Capital P 388,000 Problem 4
The business assets of Bubay and Tekla appear below: Bubay and Tekla agreed to form a partnership contributing their assets and equities subject to the following adjustments:
a) Accounts receivable of P20,000 in Bubay's books and P35,000 in Tekla's are uncollectible.
b) Inventories of P5,500 and P6,700 are worthless in Bubay's and Tekla's respective books.
c) Other assets of P2,000 for Bubay and P3,600 for Tekla are to be written off. Required: 1. Prepare the necessary journal entries in the books of Bubay.
2. Prepare the necessary journal entries in the books of Tekla.
3. Prepare the journal entries for the formation of the partnership as at July 1.
4. Prepare the statement of financial position of the newly formed partnership.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started