A AND B FORMED A PARTNERSHIP A B CASH 200K ACCOUNTS RECEIVABLE 100K INVENTORY 160K LAND 100K BUILDING 240K TOTAL 460K 340K Additional information: Included in accounts receivable is an account amounting to ₱40,000 which is deemed uncollectible. The inventory has an estimated selling price of ₱200,000 and estimated costs to sell of ₱20,000. An unpaid mortgage of ₱20,000 on the land is assumed by the partnership. The building is under-depreciated by ₱50,000. The building also has an unpaid mortgage amounting to ₱30,000, but the mortgage is not assumed by the partnership. B agreed to settle the mortgage using his personal funds. The note payable is stated at face amount. A proper valuation requires the recognition of a ₱30,000 discount on note payable. A and B shall share in profits and losses 60% and 40%, respectively. Requirements: a. Compute for the adjusted balances in the partners' capital accounts. b. Assume that a partner's capital shall be increased accordingly by contributing additional cash to bring the partners' capital balances proportionate to their profit or loss ratio. Which partner should provide additional cash and how much is the additional cash contribution? 2. A and B agreed to form a partnership. A shall contribute ₱80,000 cash while B shall contribute ₱200,000 cash. However due to the expertise that A will be bringing to the partnership, the partners agreed that they should initially have an equal interest in the partnership capital. Requirement: Using the bonus method, provide the journal entry to record the initial investments of the partners.
A AND B FORMED A
A B
CASH 200K
INVENTORY 160K
LAND 100K
BUILDING 240K
TOTAL 460K 340K
Additional information:
Included in accounts receivable is an account amounting to ₱40,000 which is deemed
uncollectible.
The inventory has an estimated selling price of ₱200,000 and estimated costs to sell of ₱20,000.
An unpaid mortgage of ₱20,000 on the land is assumed by the partnership.
The building is under-
The building also has an unpaid mortgage amounting to ₱30,000, but the mortgage is not
assumed by the partnership. B agreed to settle the mortgage using his personal funds.
The note payable is stated at face amount. A proper valuation requires the recognition of a
₱30,000 discount on note payable.
A and B shall share in profits and losses 60% and 40%, respectively.
Requirements:
a. Compute for the adjusted balances in the partners' capital accounts.
b. Assume that a partner's capital shall be increased accordingly by contributing additional cash to
bring the partners' capital balances proportionate to their profit or loss ratio. Which partner
should provide additional cash and how much is the additional cash contribution?
2. A and B agreed to form a partnership. A shall contribute ₱80,000 cash while B shall contribute
₱200,000 cash. However due to the expertise that A will be bringing to the partnership, the
partners agreed that they should initially have an equal interest in the partnership capital.
Requirement: Using the bonus method, provide the
the partners.
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