Espanol operated a specialty shop that sold fishing equipment and accessories. Her post-closing trial balance on Dec. 31, 2018 is as follows: Fish Post-Closing Trial Balance Dec. 31, 2018 Debit Credit Cash Accounts Receivable Allowance for Uncollectible Accounts P 36,000 150,000 P 16,000 440,000 135,000 Inventory Equipment Accumulated Depreciation Accounts Payable Espanol, Capital 75,000 30,000 640,000 P761,000 P761,000 Espanol plans to enter into a partnership with trusted associate, Quino, effective Jan. 1, 2019. Profits or losses will be shared equally. Espanol is to transfer all assets and liabilities of her shop to the partnership after revaluation. Quino will invest cash equal to Espanol's investment after revaluation. The agreed values are as follows: accounts receivable (net), P140,000; inventory, P460,000; and equipment (net), P124,000. The partnership will operate under the business name of Fish R' Us. Required: 1. Prepare the opening journal entries in the books of the partnership. 2. Prepare the partnership's statement of financial position as at the date of formation of the partnership.

Principles of Accounting Volume 1
19th Edition
ISBN:9781947172685
Author:OpenStax
Publisher:OpenStax
Chapter12: Current Liabilities
Section: Chapter Questions
Problem 1PB: Consider the following situations and determine (1) which type of liability should be recognized...
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Espanol operated a specialty shop that sold fishing equipment and accessories. Her
post-closing trial balance on Dec. 31, 2018 is as follows:
Fish
Post-Closing Trial Balance
Dec. 31, 2018
Debit
Credit
Cash
P 36,000
Accounts Receivable
Allowance for Uncollectible Accounts
150,000
P 16,000
440,000
Inventory
Equipment
Accumulated Depreciation
135,000
75,000
30,000
Accounts Payable
Espanol, Capital
640,000
P761,000
P761,000
Espanol plans to enter into a partnership with trusted associate, Quino, effective Jan. 1,
2019. Profits or losses will be shared equally. Espanol is to transfer all assets and
liabilities of her shop to the partnership after revaluation.
Quino will invest cash equal to Espanol's investment after revaluation. The agreed
values are as follows: accounts receivable (net), P140,000; inventory, P460,000; and
equipment (net), P124,000. The partnership will operate under the business name of
Fish R' Us.
Required:
1. Prepare the opening journal entries in the books of the partnership.
2. Prepare the partnership's statement of financial position as at the date of formation
of the partnership.
Transcribed Image Text:2 Espanol operated a specialty shop that sold fishing equipment and accessories. Her post-closing trial balance on Dec. 31, 2018 is as follows: Fish Post-Closing Trial Balance Dec. 31, 2018 Debit Credit Cash P 36,000 Accounts Receivable Allowance for Uncollectible Accounts 150,000 P 16,000 440,000 Inventory Equipment Accumulated Depreciation 135,000 75,000 30,000 Accounts Payable Espanol, Capital 640,000 P761,000 P761,000 Espanol plans to enter into a partnership with trusted associate, Quino, effective Jan. 1, 2019. Profits or losses will be shared equally. Espanol is to transfer all assets and liabilities of her shop to the partnership after revaluation. Quino will invest cash equal to Espanol's investment after revaluation. The agreed values are as follows: accounts receivable (net), P140,000; inventory, P460,000; and equipment (net), P124,000. The partnership will operate under the business name of Fish R' Us. Required: 1. Prepare the opening journal entries in the books of the partnership. 2. Prepare the partnership's statement of financial position as at the date of formation of the partnership.
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