Joy, a sole proprietor, and Baby, with no existing business, have decided to form a partnership. Joy will invest the assets of her existing business presented below at their agreed valuation, and also transfers her liabilities to the new partnership. Ledger Balances Agreed Valuation P 450,000 180,000 15,000 300,000 180,000 30,000 105,000 90,000 P 450,000 180,000 10,000 270,000 125,000 Cash Accounts Receivable Allowance for Uncollectible Accounts Merchandise Inventory Equipment Accumulated Depreciation Accounts Payable Notes Payable 105,000 90,000 Baby agreed to invest cash for a one-third interest in the firm, REQUIRED: 1. Prepare the entries to adjust and close the balances of accounts in the books of Joy. Computations should be prepared in good form. 2. Prepare the entries to record the investments of Joy and Baby in the partnership's new set of books.
Joy, a sole proprietor, and Baby, with no existing business, have decided to form a partnership. Joy will invest the assets of her existing business presented below at their agreed valuation, and also transfers her liabilities to the new partnership. Ledger Balances Agreed Valuation P 450,000 180,000 15,000 300,000 180,000 30,000 105,000 90,000 P 450,000 180,000 10,000 270,000 125,000 Cash Accounts Receivable Allowance for Uncollectible Accounts Merchandise Inventory Equipment Accumulated Depreciation Accounts Payable Notes Payable 105,000 90,000 Baby agreed to invest cash for a one-third interest in the firm, REQUIRED: 1. Prepare the entries to adjust and close the balances of accounts in the books of Joy. Computations should be prepared in good form. 2. Prepare the entries to record the investments of Joy and Baby in the partnership's new set of books.
Chapter13: Comparative Forms Of Doing Business
Section: Chapter Questions
Problem 54P
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Transcribed Image Text:Joy, a sole proprietor, and Baby, with no existing business, have decided to form a
partnership. Joy will invest the assets of her existing business presented below at their
agreed valuation, and also transfers her liabilities to the new partnership.
Ledger
Balances
Agreed
Valuation
P 450,000
180,000
15,000
300,000
180,000
30,000
105,000
90,000
P 450,000
180,000
10,000
270,000
125,000
Cash
Accounts Receivable
Allowance for Uncollectible Accounts
Merchandise Inventory
Equipment
Accumulated Depreciation
Accounts Payable
Notes Payable
105,000
90,000
Baby agreed to invest cash for a one-third interest in the firm,
REQUIRED:
1. Prepare the entries to adjust and close the balances of accounts in the books
of Joy. Computations should be prepared in good form.
2. Prepare the entries to record the investments of Joy and Baby in the
partnership's new set of books.
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ISBN:
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Author:
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Publisher:
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