Activity 2Olivia Jadulco, Edgar Mabad and Diona Anghag were partners in a business engaged inprinting and publishing. The Statement of Financial Position reveals that their businesshas no obligation to outside creditors.ASSETSPARTNER'S EQUITYCashP120,000Jadulco, Capital (30%)P400,000Accounts Receivable150,000Magbad, Capital (20%)280,000Inventories260,000Anghag, Capital (50%)150,000Equipment300,000TotalP830,000Total830,000On January 1, 20A, the partners agree to admit Mayla Cañete as a new partner afterconsidering the following revaluation and adjustments:1. Allowance for doubtful accounts of P20,000 is to be established for possibleuncollectible account.2. Inventories should be recorded at their net realizable value of P240,0003. The net book value of the equipment should be adjusted at P250,000.4. Accrued expenses should be recognized, P10,000.Instruction:1. Prepare necessary adjusting journal entries.2. Record the admission of Cañete assuming:a) she purchases 1/3 of partnership's interest.b) she invests P200,000 for a 1/4 interest on agreed capitalization of P930,000.c) she invest P200,000 for a 1/5 interest in the new firm's capital of P930,000.

A partnership is a kind of business and a formal agreement between two or more people.

1. Prepare necessary adjusting journal entries. 2. Record the admission of Cañete assuming: a) she purchases 1/3 of partnership's interest. b) she invests P200,000 for a 1/4 interest on agreed capitalization of P930,000. c) she invest P200,000 for a 1/5 interest in the new firm's capital of P930,000.

1. Prepare necessary adjusting journal entries. 2. Record the admission of Cañete assuming: a) she purchases 1/3 of partnership's interest. b) she invests P200,000 for a 1/4 interest on agreed capitalization of P930,000. c) she invest P200,000 for a 1/5 interest in the new firm's capital of P930,000.

College Accounting, Chapters 1-27 (New in Accounting from Heintz and Parry)

22nd Edition

ISBN:9781305666160

Author:James A. Heintz, Robert W. Parry

Publisher:James A. Heintz, Robert W. Parry

Chapter15: Financial Statements And Year-end Accounting For A Merchandising Business

Section: Chapter Questions

Problem 2CE

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