10. As of July 1, 2020, Somine and Tamayo decided to form a partnership. Theirbalance sheets on this date are:TamayoP37,500225,000202,500270,000P705,000 P735,000P135,000 P240,000SomineP15,000540,000CashAccounts receivableMerchandise inventoryMachinery and equipment 150,000TotalAccounts payableSomine, capitalTamayo, capital570,000495,000P705,000 P735,000TotalThe partners agreed that the machinery and equipment of Somine is under-depreciated by P15,000 and that of Tamayo by P45,000. Allowance fordoubtful accounts is to be set up amounting to P120,000 for Somine andP45,000 for Tamayo. The partnership agreement provides for a profit andloss ratio and capital interest of 60% to Somine and 40% to Tamayo. Howmuch cash must Somine invest to bring the partners' capital balancesproportionate to their profit and loss ratio?a. P142,500b. P52,500C. P172,500d. P102,500

Partnership is an agreement or association between two or more than two persons, in which they…

Answered: 10. As of July 1, 2020, Somine and…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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As of July 1, 2020, MM and AA decided to form a partnership. Their balance sheets on this date are: Cash Accounts Receivable Allowance for doubtful accounts Merchandise Inventory Machinery and Equipment Total P705,000 MM AA P 38,000 255,000 (30,000) 202,000 270,000 P735,000 240,000 495,000 P735,000 P 15,000 680,000 (140,000) - 150,000 Accounts Payable MM, capital AA, capital Total P705,000 135,000 570,000 - The partners agreed that the machinery and equipment of MM is under depreciated by P15,000 and that of AA by P45,000. Allowances for doubtful accounts is to be set up amounting to P120,000 for MM and P40,000 for AA. The partnership agreement provides for the profit and loss ratio and capital interest of 60% to MM and 40% to AA with AA’s capital as base. How much cash must MM invest to bring the partner's capital balances proportionate to their profit and loss ratio?
1. As of July 1, 2020, MM and AA decided to form a partnership. Their balance sheets on this date are: Cash P 15,000 P 38,000Accounts Receivable 680,000 255,000Allowance for doubtful accounts (140,000) (30,000)Merchandise Inventory 202,000Machinery and Equipment 150,000 270,000Total P705,000 P735,000 Accounts Payable 135,000 240,000MM, capital 570,000AA, capital - 495,000Total P705,000 P735,000 The partners agreed that the machinery and equipment of MM is under depreciated by P15,000 and that of AA by P45,000. Allowances for doubtful accounts is to be set up amounting to P120,000 for MM and P40,000 for AA. The partnership agreement…
As of July 1, 2020, MM and AA decided to form a partnership. Their balance sheets on this date are: MM AA Cash P 15,000 P 38,000 Accounts Receivable 680,000 255,000 Allowance for doubtful accounts (140,000) (30,000) Merchandise Inventory - 202,000 Machinery and Equipment 150,000 270,000 Total P705,000 P735,000 Accounts Payable 135,000 240,000 MM, capital 570,000 AA, capital - 495,000 Total P705,000 P735,000 The partners agreed that the machinery and equipment of MM is under depreciated by P15,000 and that ofAA by P45,000. Allowances for doubtful accounts is to be set up amounting to P120,000 for MM andP40,000 for AA. The partnership agreement provides for the profit and loss ratio and capital interest of60% to MM and 40% to AA with AA’s capital as base. How much cash must MM invest to bring the partner's capital balances proportionate to their profit and loss ratio?
2. Psalm and Selah decided to form a partnership on June 30, 2030, Assets contributed by the partners are: Psalm Selah Book Value Fair Value Book Value Fair value Cash P375,000 P375,000 P875,000 P875,000 Merchandise inventory 95,000 125,000 Furniture and fixtures 350,000 312,500 872,500 937,500 Transportation equipment 3,262,500 2,812,500 The transportation equipment is subject to a mortgage loan of P1,125,000, which is to be assumed by the partnership. The partnership agreement provides that Psalm and Selah share profits and losses of 30% and 70% respectively. Assuming that the partners agreed to bring their respective capital in proportion to their profit and loss ratio, using Selah capital as base. How much additional cash is to be invested (withdrawn) by Psalm? A. P(687,500)B. P(987,500)C. P 875,000 D. P 687,500
As of June 30, 2020, Kagura and Hayabusa decided to form a Partnership. Their balance sheet on this date is as follows: Account Kagura Hayabusa Cash 70,000 40,000 Accounts Receivable 20,000 30,000 Allowance for doubtful accounts - 2,000 Notes receivable 10,000 20,000 Merchandise Inventory 80,000 100,000 Machinery and equipment 120,000 - Furnitures and Fixtures - 110,000 Accumulated Depreciation 10,000 20,000 Accounts payable 30,000 20,000 Notes payable 20,000 5,000 The partners agreed to the following adjustments: Uncollectible accounts of P3,000 for Kagura is to be provided; and 10% of the account receivable for Hayabusa is uncollectible. Kagura’s inventory amounting to P5,000 is worthless, while Hayabusa’s inventory has a fair value of P140,000 and costs to sell of P10,000. An interest of 10% on notes receivable dated March 31, 2020 is to be accrued for both books. Accrued rent income of…
As of June 30, 2020, Kagura and Hayabusa decided to form a Partnership. Their balance sheet on this date is as follows: Account Kagura Hayabusa Cash 70,000 40,000 Accounts Receivable 20,000 30,000 Allowance for doubtful accounts - 2,000 Notes receivable 10,000 20,000 Merchandise Inventory 80,000 100,000 Machinery and equipment 120,000 - Furnitures and Fixtures - 110,000 Accumulated Depreciation 10,000 20,000 Accounts payable 30,000 20,000 Notes payable 20,000 5,000 The partners agreed to the following adjustments: Uncollectible accounts of P3,000 for Kagura is to be provided; and 10% of the account receivable for Hayabusa is uncollectible. Kagura’s inventory amounting to P5,000 is worthless, while Hayabusa’s inventory has a fair value of P140,000 and costs to sell of P10,000. An interest of 10% on notes receivable dated March 31, 2020 is to be accrued for both books. Accrued rent income of…
9. Graydon and Logan formed the GL Partnership on January 1, 2020, by combining the separate assets of their respective proprietorships. Information relating to their assets and liabilities is as follows: Graydon's assets Logan's assets Book Market Book Market value value value value Cash $100,000 $100,000 $95,000 $95,000 Net accounts receivable 39,000 37,000 28,000 36,000 Inventory 60,000 75,000 55,000 66,000 Land…
The Partnership of Rose and Dailine is being dissolved, and the assets and equities at book value and fair value and profit and loss ratios at January 1, 2021 are as follows:Book Value Fair ValueCash P20,000 P20,000Accounts Receivables – net 100,000 100,000 Inventories 50,000 200,000Plant Assets – net 100,000 120,000P270,000 P440,000Accounts Payable P50,000 P50,000Rose, Capital 120,000Dailine, Capital 100,000P270,000 Rose and Dailine agreed to admit Janyla into the partnership for one-third interest. Janyla invests P95,000 cash and a building to be used in the business with a book value to Janyla for P100,000 and a fair value of P120,000.Compute the capital balance of Dailine after the admission assuming that the assets are revalued and goodwill is recognized.a. P175,000 c. P195,000b. 155,000 D. 205,000
On July 1, 2020, Wency and William agreed to form a partnership from their respective proprietorship businesses and to share profits equally. Wency and William’s balance sheet before the formation were: Wency William Cash P 6,000 P 15,000 Accounts receivable 36,000 21,000 Merchandise inventory 99,000 126,000 Prepaid rent 12,000 Store equipment 120,000 90,000 Accum. Depreciation ( 45,000) ( 54,000) Building 375,000 Accum. Depreciation (75,000) Land 180,000 - Totals P 696,000 P 210,000 Accounts payable P 22,500 P 9,000 Mortgage payable 180,000 - Capital 493,500 201,000 Totals P 696,000 P 210,000 The fair values of Wency’s and William’s assets were: Wency William Merchandise inventory P 81,000 P 135,000 Prepaid rent - 0 Store equipment 45,000 19,500 Building 750,000 -…
The Pelosi, Trump, and Biden (PTB) Partnership had the following balance sheet on December 31st 2020: Cash 50000 accounts payable 200000 account rec. 200000 note payable 100000 inventory 300000 building 300000 Pelosi capital 100000 equipment 200000 Trump capital 700000 land 100000 Biden capital 50000 total asset 1150000 Pelosi, Trump and Biden equally share profits: Pelosi 40%, Trump 50% Biden 10%. Pelosi gets a salary of $40,000. Trump gets a salary of $50,000. Biden doesn't get a salary. Partners receive interest at 10% on their beginning of the year capital balance. Each year Pelosi takes out $70,000 for beauty treatments, Trump takes out $55,000 for Orange Hair Dye, and Biden takes out $20,000 for ice cream. Income before partner interest and partner salaries is as follows: 2021 $300,000 2022 $40,000 2023 $315,000 Required: A) determine the distribution of income to the partners each year. B) determine the…
On January 02, 2019, the business assets and liabilities of Gail Anne & Precious were as follows: Gail AnnePrecious CashP28,000P62,000 Receivables 200,000 600,000 Inventories 120,000 200,000 PPE 650,000 535,000 Other Assets 2,000 3,000 Accounts Payable 180,000 250,000 Notes Payable 200,000 350,000 Gail Anne and Precious agreed to form a partnership by contributing their net assets subject to the following adjustments: ➢ Receivables of P20,000 in Gail Anne’s books and P40,000 in Precious’ books are uncollectible ➢ Inventories of P6,000 and P7,000 in the respective books of Gail Anne and Precious are worthless ➢ Other assets in both books are to be written off ➢ Accrued interest on notes payable equal to 10% is to be established. The note payable of Gail Anne was dated August 01, 2018 while that of Precious, was dated April 01, 2018. The balances of selected accounts after the formation are: Assets…
On March 1, 2020, EE and FF decided to combine their business and form a partnership. Their balance sheets on March 1 before adjustments showed the following: EE FF CASH 90,000 37,500 ACCOUNTS RECEIVABLE 185,000 135,000 INVENTORIES 300,000 1965,000 FURNITURE AND FIXTURES 350,000 100,000 ACCUMULATED DEPRECIATION (50,000) (10,000) OFFICE EQUIPMENT 115,000 27,500 PREPAID EXPENSES 63,750 30,000 TOTAL 1,053,750 515,000 ACCOUNTS PAYABLE 457,500 180,000 EE, CAPITAL 596,250 FF, CAPITAL 335,000 TOTAL 1,053,750 515,000 They agreed to have the following items recorded in their books: 1. Provide 2% allowance for doubtful accounts.2. EE’s furniture and fixtures should be P310,000, while FF’s office equipment is underdepreciated by P2,500.3. Rent expense incurred previously by EE was not yet recorded amounting to P10,000, whilesalary expenses incurred by FF amounting to P8,000 was also not recorded.4. The fair value of EE’s and FF’s inventory amounted…

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