The name of the partnership will be Medina and Loqueloque Hunting Gears partners have agreed to effect the following adjustments: a. Medina's merchandise inventory is to be reduced by P105,200. The inventory Loqueloque will be increased by P7,200. b. The following are the fair market values of the various assets: Medina Loqueloque P108,000 192,000 16,000 124,000 P40,000 Land Building Office Equipment Repair Equipment - One-half of the notes payable of Medina are personal notes. All other liabilities of the partners are assumed by the partnership. d. The prepaid rent in the books of Loqueloque will be consumed by the partnership Required: Prepare the journal entries to record the formation of the partnership. NAME SECTION SCORE PROFESSOR 1 Problem 19 Two Sole Proprietors Forma Partnership Yumol P22,354 567.890 260,102 Medina and Loqueloque are fierce competitors who sell hunting equipment. They finally decided to join forces in order to increase their business and reduce costs. An agreement is reached between the two to begin operations as a partnership on Mar, 1. 2019 428,267 34,789 3.600 P1,317,002 Medina and Loqueloque have decided to share profits or losses in the ratio of 50:40, respectively. 1 1 1 1 1 The statements of financial position of Medina and Loqueloque as at Mar. 1, 2019 are as follows: P 243,650 345,000 Medina P 42,000 389,200 (22.400) 461,600 728,352 01.317 002 Loqueloque P 30,000 169,200 (14,400) 300,800 6,000 4,000 1 cate Cash Accounts Receivable Allowance for Uncollectible Accounts Merchandise Inventory Prepaid Rent Office Supplies Land Building Accumulated Depreciation Office Equipment Accumulated Depreciation Repair Equipment Accumulated Depreciation 30,400 40,000 128,000 (32,000) 24,000 (6,000) 172,000 (68,000) P1,158,800 62,000 (13,200) P544,400 Total Assets P111,600 P 120.000 170,000 200,000 668,800 Notes Payable Accounts Payable Mortgage Payable Medina, Capital Loqueloque, Capital Total Liabilities and Owners' Equity 432,800 P544,400 P1,158,800 Chapter 1: Basic Considerations and Formation | 1.41