1. On July 1, 2021, Jungkook admits Jimin for an interest in her business. On this date, Jungkook's capital account shows a balance of P1,080,000. The following were the terms and agreement of the partners upon its formation: a. Jungkook's outstanding receivable is P500,000 and the allowance for uncollectible accounts has a balance of P20,000. The accounts receivable is estimated to be 85% collectible. b. Unearned interest account of Jungkook of P24,000 credit represents interest collected in advance for six months starting on June 1, 2021. Interest already earned amounting to
1. On July 1, 2021, Jungkook admits Jimin for an interest in her business. On this date, Jungkook's capital account shows a balance of P1,080,000. The following were the terms and agreement of the partners upon its formation: a. Jungkook's outstanding receivable is P500,000 and the allowance for uncollectible accounts has a balance of P20,000. The accounts receivable is estimated to be 85% collectible. b. Unearned interest account of Jungkook of P24,000 credit represents interest collected in advance for six months starting on June 1, 2021. Interest already earned amounting to
Financial Accounting
14th Edition
ISBN:9781305088436
Author:Carl Warren, Jim Reeve, Jonathan Duchac
Publisher:Carl Warren, Jim Reeve, Jonathan Duchac
Chapter12: Accounting For Partnerships And Limited Liability Companies
Section: Chapter Questions
Problem 4PB
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How much is the net adjustment to Jungkook, Capital as a result of the foregoing?
Transcribed Image Text:1. On July 1, 2021, Jungkook admits Jimin for an interest in her business. On this date,
Jungkook's capital account shows a balance of P1,080,000. The following were the terms and
agreement of the partners upon its formation:
a. Jungkook's outstanding receivable is P500,000 and the allowance for uncollectible
accounts has a balance of P20,000. The accounts receivable is estimated to be 85%
collectible.
b. Unearned interest account of Jungkook of P24,000 credit represents interest collected in
advance for six months starting on June 1, 2021. Interest already earned amounting to
P4,000 should be recognized.
c. Total supplies purchased during the year were charged to supplies expense account. On
July 1, there were unused supplies of P10,000.
d. Inventories should be recognized at market value, which exceeds its carrying value by
P60,000.
e. Equipment account of Jungkook should be depreciated for an additional amount of
P40,000.
f. Jimin is to invest cash equal to 4 of the total partnership capital. The new capital is based
on the adjusted capital of Jungkook such that Jungkook's adjusted capital represents
already % of the total nartnershin canital.
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