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1 Sabio, as her original investment in the firm of Sabio and Mariano, 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 Sabio's accounts receivable of P360,000, realizable to the extent of 85%. Required: Prepare the journal entry to record Sabio's investment in the partnership on June 13.

1 Sabio, as her original investment in the firm of Sabio and Mariano, 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 Sabio's accounts receivable of P360,000, realizable to the extent of 85%. Required: Prepare the journal entry to record Sabio's investment in the partnership on June 13.

Principles of Accounting Volume 1
Principles of Accounting Volume 1
19th Edition
ISBN:9781947172685
Author:OpenStax
Publisher:OpenStax
Chapter12: Current Liabilities
Section: Chapter Questions
Problem 1PB: Consider the following situations and determine (1) which type of liability should be recognized...
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2 Espanol operated a specialty shop that sold fishing equipment and accessories. Her post-closing trial balance on Dec. 31, 2018 is as follows: Fish Post-Closing Trial Balance Dec. 31, 2018 Debit Credit Cash P 36,000 Accounts Receivable Allowance for Uncollectible Accounts 150,000 P 16,000 440,000 Inventory Equipment Accumulated Depreciation 135,000 75,000 30,000 Accounts Payable Espanol, Capital 640,000 P761,000 P761,000 Espanol plans to enter into a partnership with trusted associate, Quino, effective Jan. 1, 2019. Profits or losses will be shared equally. Espanol is to transfer all assets and liabilities of her shop to the partnership after revaluation. Quino will invest cash equal to Espanol's investment after revaluation. The agreed values are as follows: accounts receivable (net), P140,000; inventory, P460,000; and equipment (net), P124,000. The partnership will operate under the business name of Fish R' Us. Required: 1. Prepare the opening journal entries in the books of the partnership. 2. Prepare the partnership's statement of financial position as at the date of formation of the partnership.
Transcribed Image Text:2 Espanol operated a specialty shop that sold fishing equipment and accessories. Her post-closing trial balance on Dec. 31, 2018 is as follows: Fish Post-Closing Trial Balance Dec. 31, 2018 Debit Credit Cash P 36,000 Accounts Receivable Allowance for Uncollectible Accounts 150,000 P 16,000 440,000 Inventory Equipment Accumulated Depreciation 135,000 75,000 30,000 Accounts Payable Espanol, Capital 640,000 P761,000 P761,000 Espanol plans to enter into a partnership with trusted associate, Quino, effective Jan. 1, 2019. Profits or losses will be shared equally. Espanol is to transfer all assets and liabilities of her shop to the partnership after revaluation. Quino will invest cash equal to Espanol's investment after revaluation. The agreed values are as follows: accounts receivable (net), P140,000; inventory, P460,000; and equipment (net), P124,000. The partnership will operate under the business name of Fish R' Us. Required: 1. Prepare the opening journal entries in the books of the partnership. 2. Prepare the partnership's statement of financial position as at the date of formation of the partnership.
1 Sabio, as her original investment in the firm of Sabio and Mariano, 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 Sabio's accounts receivable of P360,000, realizable to the extent of 85%. Required: Prepare the journal entry to record Sabio's investment in the partnership on June 13.
Transcribed Image Text:1 Sabio, as her original investment in the firm of Sabio and Mariano, 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 Sabio's accounts receivable of P360,000, realizable to the extent of 85%. Required: Prepare the journal entry to record Sabio's investment in the partnership on June 13.
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