A Sole Proprietor and an Individual With No Business Form a Partnership (See attached image) Question: What are the necessary journal entries in the books of the Partnership? On Apr. 8, 2016, Tolentino who has her own retail business and Tan, decided to form apartnership wherein they will divide profits in the ratio of 40:60, respectively. Thestatement of financial position of Tolentino is as follows:Tolentino MarketingStatement of Financial PositionApril 8, 2016AssetsCashP 4,000Accounts ReceivableP160,00016,000Less: Allowance for Uncollectible Accounts144,000InventoryEquipmentLess: Accumulated DepreciationTotal Assets200,000P 50,00010,00040,000P388,000Liabilities and CapitalAccounts PayableTolentino, CapitalTotal Liabilities and CapitalP 36,000352,000P388,000Conditions agreed upon before the formation of the partnership:a. The accounts receivable of Tolentino is estimated to be 70% realizable.b. The accumulated depreciation of the equipment will be increased by P10,000.c. The accounts payable will be assumed by the partnership.d. The capital of the partnership is based on the adjusted capital balance of Tolentino.Tan is to contribute cash in order to make the partner's capital balancesproportionate to the profit and loss ratio.

A journal entry is used to record day-to-day transactions of the business by debiting and crediting…

On Apr. 8, 2016, Tolentino who has her own retail business and Tan, decided to form a partnership wherein they will divide profits in the ratio of 40:60, respectively. The statement of financial position of Tolentino is as follows: Tolentino Marketing Statement of Financial Position April 8, 2016 Assets Cash Accounts Receivable Less: Allowance for Uncollectible Accounts Inventory Equipment Less: Accumulated Depreciation Total Assets P 4,000 P160,000 16,000 144,000 200,000 P 50,000 10,000 40,000 P388,000 Liabilities and Capital Accounts Payable Tolentino, Capital Total Liabilities and Capital P 36,000 352,000 P388,000 Conditions agreed upon before the formation of the partnership: a. The accounts receivable of Tolentino is estimated to be 70% realizable. b. The accumulated depreciation of the equipment will be increased by P10,000. c. The accounts payable will be assumed by the partnership. d. The capital of the partnership is based on the adjusted capital balance of Tolentino. Tan is to contribute cash in order to make the partner's capital balances proportionate to the profit and loss ratio.

On Apr. 8, 2016, Tolentino who has her own retail business and Tan, decided to form a partnership wherein they will divide profits in the ratio of 40:60, respectively. The statement of financial position of Tolentino is as follows: Tolentino Marketing Statement of Financial Position April 8, 2016 Assets Cash Accounts Receivable Less: Allowance for Uncollectible Accounts Inventory Equipment Less: Accumulated Depreciation Total Assets P 4,000 P160,000 16,000 144,000 200,000 P 50,000 10,000 40,000 P388,000 Liabilities and Capital Accounts Payable Tolentino, Capital Total Liabilities and Capital P 36,000 352,000 P388,000 Conditions agreed upon before the formation of the partnership: a. The accounts receivable of Tolentino is estimated to be 70% realizable. b. The accumulated depreciation of the equipment will be increased by P10,000. c. The accounts payable will be assumed by the partnership. d. The capital of the partnership is based on the adjusted capital balance of Tolentino. Tan is to contribute cash in order to make the partner's capital balances proportionate to the profit and loss ratio.

Financial Accounting: The Impact on Decision Makers

10th Edition

ISBN:9781305654174

Author:Gary A. Porter, Curtis L. Norton

Publisher:Gary A. Porter, Curtis L. Norton

Chapter13: Financial Statement Analysis

Section: Chapter Questions

Problem 13.3DC: Comparing Two Companies in the Same Industry: Chipotle and Panera Bread This case should be...

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