9. On October 1, A and B pooled their assets to form a Partnership, with the firm to take over the business assets and assume liabilities. Partners capitals are to be based on net assets transferred after the following adjustments: The partners agreed to the following adjustments: a. A's inventory is to be increased by P15,000, while B's inventory has a current fair market value of P100,000 and an agreed value of P110,000. B's unadjusted inventory amounted to P90,000. b. Machinery and equipment are over-depreciated by P5,000 and P8,000 for A and B, respectively. c. Furnitures and fixtures for partner A has a current fair market value of P60,000 and an agreed value P50,000. Furnitures and fixtures is carried at its cost amounting to P100,000 with accumulated depreciation of P45,000. d. Accrued rent income of P10,000 for A, and accrued salaries of P5,000 for B should be recognized on their respective books. The individual trial balances on October 1, before adjustments, follow: DESCRIPTION A B Assets P120,000 P130,000 Liabilities 50,000 60,000 Assume that the partners agreed to account for the formation using the bonus approach, determine the amount of bonus.
9. On October 1, A and B pooled their assets to form a Partnership, with the firm to take over the business assets and assume liabilities. Partners capitals are to be based on net assets transferred after the following adjustments: The partners agreed to the following adjustments: a. A's inventory is to be increased by P15,000, while B's inventory has a current fair market value of P100,000 and an agreed value of P110,000. B's unadjusted inventory amounted to P90,000. b. Machinery and equipment are over-depreciated by P5,000 and P8,000 for A and B, respectively. c. Furnitures and fixtures for partner A has a current fair market value of P60,000 and an agreed value P50,000. Furnitures and fixtures is carried at its cost amounting to P100,000 with accumulated depreciation of P45,000. d. Accrued rent income of P10,000 for A, and accrued salaries of P5,000 for B should be recognized on their respective books. The individual trial balances on October 1, before adjustments, follow: DESCRIPTION A B Assets P120,000 P130,000 Liabilities 50,000 60,000 Assume that the partners agreed to account for the formation using the bonus approach, determine the amount of bonus.
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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Transcribed Image Text:9. On October 1, A and B pooled their assets to form a Partnership, with the firm to take over the business assets and
assume liabilities. Partners capitals are to be based on net assets transferred after the following adjustments:
The partners agreed to the following adjustments:
a. A's inventory is to be increased by P15,000, while B's inventory has a current fair market value of
P100,000 and an agreed value of P110,000. B's unadjusted inventory amounted to P90,000.
b. Machinery and equipment are over-depreciated by P5,000 and P8,000 for A and B, respectively.
c. Furnitures and fixtures for partner A has a current fair market value of P60,000 and an agreed value
P50,000. Furnitures and fixtures is carried at its cost amounting to P100,000 with accumulated depreciation
of P45,000.
d. Accrued rent income of P10,000 for A, and accrued salaries of P5,000 for B should be recognized on their
respective books.
The individual trial balances on October 1, before adjustments, follow:
DESCRIPTION
A
B
Assets
P120,000
P130,000
Liabilities
50,000
60,000
Assume that the partners agreed to account for the formation using the bonus approach, determine the
amount of bonus.
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