Ahne, a sole proprietor owns a daycare center named Azsh™. Her business operation was rapidly expanding but her capacity to support the operation needs and to manage the business was limited. She decided to ask her friend Johnny, to help him in the business. They agreed to be partners in the business, and consequently, the business needs to be converted into a partnership. The data of Azsh™ before the partnership formation were as follows: Cash 80,000.00 Accounts Receivable 50,000.00 Supplies 15,000.00 Land 100,000.00 Building 250,000.00 Accumulated Deprecation (50,000.00) 200,000.00 Furniture and Fixtures 100,000.00 Accumulated Depreciation (20,000.00) 80,000.00 Total Assets 525,000.00 Accounts Payable 25,000.00 Mortgage Payable 120,000.00 Ahne, Capital 380,000.00 Total Liabilities and Owner's Equity 525,000.00 Additional Information: Accounts Receivable is 90% realizable. Land has a fair value of 150% of its book value. Building is undervalued by P 30,000. All other assets are fairly valued. Additional liabilities of P 20,000 should be recognized by Ahne. Johnny will invest cash equivalent to 40% of the net assets of the partnership 12. The adjusted liabilities of Ahne amount to ____. A. P 165,000 B. P 145,000 C. P 155,000 D. P 175,000 13. The adjusted net assets of Ahne amount to ____. A. P 435,000 B. P 355,000 C. P 405,000 D. P 455,000 14. The cash investment of Johnny amount to ____. A. P 303,333 B. P 236,667 C. P 270,000 D. P 290,000
Ahne, a sole proprietor owns a daycare center named Azsh™. Her business operation was rapidly expanding but her capacity to support the operation needs and to manage the business was limited. She decided to ask her friend Johnny, to help him in the business. They agreed to be partners in the business, and consequently, the business needs to be converted into a partnership. The data of Azsh™ before the partnership formation were as follows: Cash 80,000.00 Accounts Receivable 50,000.00 Supplies 15,000.00 Land 100,000.00 Building 250,000.00 Accumulated Deprecation (50,000.00) 200,000.00 Furniture and Fixtures 100,000.00 Accumulated Depreciation (20,000.00) 80,000.00 Total Assets 525,000.00 Accounts Payable 25,000.00 Mortgage Payable 120,000.00 Ahne, Capital 380,000.00 Total Liabilities and Owner's Equity 525,000.00 Additional Information: Accounts Receivable is 90% realizable. Land has a fair value of 150% of its book value. Building is undervalued by P 30,000. All other assets are fairly valued. Additional liabilities of P 20,000 should be recognized by Ahne. Johnny will invest cash equivalent to 40% of the net assets of the partnership 12. The adjusted liabilities of Ahne amount to ____. A. P 165,000 B. P 145,000 C. P 155,000 D. P 175,000 13. The adjusted net assets of Ahne amount to ____. A. P 435,000 B. P 355,000 C. P 405,000 D. P 455,000 14. The cash investment of Johnny amount to ____. A. P 303,333 B. P 236,667 C. P 270,000 D. P 290,000
Century 21 Accounting General Journal
11th Edition
ISBN:9781337680059
Author:Gilbertson
Publisher:Gilbertson
Chapter23: Accounting For Partnerships
Section: Chapter Questions
Problem 1CP
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Question
Ahne, a sole proprietor owns a daycare center named Azsh™. Her business operation was rapidly expanding but her capacity to support the operation needs and to manage the business was limited. She decided to ask her friend Johnny, to help him in the business. They agreed to be partners in the business, and consequently, the business needs to be converted into a partnership. The data of Azsh™ before the partnership formation were as follows:
|
Cash |
80,000.00 |
|
|
Accounts Receivable |
50,000.00 |
|
|
Supplies |
15,000.00 |
|
|
Land |
100,000.00 |
|
|
Building |
250,000.00 |
|
|
Accumulated Deprecation |
(50,000.00) |
200,000.00 |
|
Furniture and Fixtures |
100,000.00 |
|
|
Accumulated |
(20,000.00) |
80,000.00 |
|
Total Assets |
525,000.00 |
|
|
Accounts Payable |
25,000.00 |
|
|
Mortgage Payable |
120,000.00 |
|
|
Ahne, Capital |
380,000.00 |
|
|
Total Liabilities and Owner's Equity |
525,000.00 |
Additional Information:
- Accounts Receivable is 90% realizable.
- Land has a fair value of 150% of its book value.
- Building is undervalued by P 30,000.
- All other assets are fairly valued.
- Additional liabilities of P 20,000 should be recognized by Ahne.
- Johnny will invest cash equivalent to 40% of the net assets of the partnership
12. The adjusted liabilities of Ahne amount to ____.
A. P 165,000
B. P 145,000
C. P 155,000
D. P 175,000
13. The adjusted net assets of Ahne amount to ____.
A. P 435,000
B. P 355,000
C. P 405,000
D. P 455,000
14. The cash investment of Johnny amount to ____.
A. P 303,333
B. P 236,667
C. P 270,000
D. P 290,000
15. Assuming Johnny will invest cash for a 60% share in the partnership, how much cash should he invest?
A. P 682,500
B. P 607,500
C. P 532,500
D. P 652,500
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