Answered step by step
Verified Expert Solution
Question
1 Approved Answer
The following transactions of Best Pizza, owned by Reyes, Ortiz and Flores, took place from March 1 to May 31, 2019; March 1 Reyes, who
The following transactions of Best Pizza, owned by Reyes, Ortiz and Flores, took place from March 1 to May 31, 2019; March 1 Reyes, who owns an ice cream parlor, invested cash of P80,000 and merchandise costing P120,000 but with a fair value of P70,000. Customers accounts of P50,000 were also taken over by the partnership at its realizable value of 80% (Recognize an allowance for doubtful accounts for 20% of cost). Ortiz invested cash of P40,000 and pieces of furniture costing P150,000 which the partners agree to be 50% depreciated to arrive at its current fair value May 1 Flores, an expert in pizza making, invested imported cooking equipment costing P350,000 but which fair value dropped by 40% of its cost. Flores made a down payment of P200,000 when this was purchased and issued a note for the balance half of which is still unpaid . Partners agree that the liability will be assumed by the partnership. May 31 Partners agree Partners agree that additional cash investments be made so that all partners will have an equal sharing on the assets and profits of the business. Direction: a) In parallel column, list down the assets and liabilities, at fair values, contributed by each partner and determine each partner's contribution. b) Who should make additional cash investment and at what amount? c) Prepare three separate entries to record the contribution of each partner
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