PART L PARTNERSHIP FORMATION AND OPERATIONSOn May 1, 2018, three existing sole proprietors in Cotabato City agreed to form a partnership to engage ina manufacturing business. Their contributions are as follow:JuanaLauraZennyCordillo200.000350,000500,00050,000MendezSevillaCash in BankLandOffice BuildingAccumulated Depreciation-Office BuildingOffice EquipmentAccumulated Depreciation-Office EquipimentFurniture and FixturesAccumulated Depreciation-Furniture & FixturesAccounts PayableMortgage Payable200.000200, 000270,00020,00095,0005,00020,000190,00010,00010,000200,000The partners also agreed that the new partnership will assume their respective sole proprietorship liabilities,and agreed further that the partnership's starting capitalization should be at P2,000,000, and that they areto contribute additional cash necessary to make their individual capital to equal their profit and loss ratio of3:4:3, respectively.Requirement #1:Prepare journal entries in the books of the new partnership to.record the initial investments of the partners.

Journal Entry: It is the entry which is used to record the business transaction of an enterprise in…

PART L PARTNERSHIP FORMATION AND OPERATIONS On May 1, 2018, three existing sole proprietors in Cotabato City agreed to form a partnership to engage in a manufacturing business. Their contributions are as follow. Juana Laura Mendez 200.000 Zemmy Cordillo Sevilla Cash in Bank Land Office Building Accumulated Depreciation-Office Building Office Equipment Accumulated Depreciation-Office Equipment Furniture and Fixtures Accumulated Depreciation-Furniture & Fixtures Accounts Payable Mortgage Payable 200.000 350,000 500,000 50,000 200, 000 270,000 20,000 95,000 5,000 20,000 190,000 10,000 10,000 200,000 The partners also agreed that the new partnership will assume their respective sole proprietorship liabilities, and agreed further that the partnership's starting capitalization should be at P2,000,000, and that they are to contribute additional cash necessary to make their individual capital to equal their profit and loss ratio of 3:4:3, respectively. Requirement #1: Prepare journal entries in the books of the new partnership to.record the initial investments of the pärtners. 11

PART L PARTNERSHIP FORMATION AND OPERATIONS On May 1, 2018, three existing sole proprietors in Cotabato City agreed to form a partnership to engage in a manufacturing business. Their contributions are as follow. Juana Laura Mendez 200.000 Zemmy Cordillo Sevilla Cash in Bank Land Office Building Accumulated Depreciation-Office Building Office Equipment Accumulated Depreciation-Office Equipment Furniture and Fixtures Accumulated Depreciation-Furniture & Fixtures Accounts Payable Mortgage Payable 200.000 350,000 500,000 50,000 200, 000 270,000 20,000 95,000 5,000 20,000 190,000 10,000 10,000 200,000 The partners also agreed that the new partnership will assume their respective sole proprietorship liabilities, and agreed further that the partnership's starting capitalization should be at P2,000,000, and that they are to contribute additional cash necessary to make their individual capital to equal their profit and loss ratio of 3:4:3, respectively. Requirement #1: Prepare journal entries in the books of the new partnership to.record the initial investments of the pärtners. 11

Financial Accounting

15th Edition

ISBN:9781337272124

Author:Carl Warren, James M. Reeve, Jonathan Duchac

Publisher:Carl Warren, James M. Reeve, Jonathan Duchac

Chapter12: Accounting For Partnerships And Limited Liability Companies

Section: Chapter Questions

Problem 14E

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2. Psalm and Selah decided to form a partnership on June 30, 2030, Assets contributed by the partners are: Psalm Selah Book Value Fair Value Book Value Fair value Cash P375,000 P375,000 P875,000 P875,000 Merchandise inventory 95,000 125,000 Furniture and fixtures 350,000 312,500 872,500 937,500 Transportation equipment 3,262,500 2,812,500 The transportation equipment is subject to a mortgage loan of P1,125,000, which is to be assumed by the partnership. The partnership agreement provides that Psalm and Selah share profits and losses of 30% and 70% respectively. Assuming that the partners agreed to bring their respective capital in proportion to their profit and loss ratio, using Selah capital as base. How much additional cash is to be invested (withdrawn) by Psalm? A. P(687,500)B. P(987,500)C. P 875,000 D. P 687,500
Coco and Martin agreed to form a partnership which shall be engaged in the buy and sell of RTW apparels. The following items are being invested to form CM Partnership: AGREED VALUATION COCO MARTIN Cash P100,000 P100,000 Merchandise Inventory 100,000 Land 200,000 Building 400,000 Equipment 200,000 Subtotals P400,000 P700,000 Mortgage on building assumed by the partnership (200,000) Totals P400,000 P500,000 Instruction: Prepare journal entries to record the formation of CM Partnership: A. Assuming that Coco and Martin agree that each partner is to receive a capital credit equal to the agreed valuation of the net assets each partner invested. B. Assuming that Coco and Martin agree that each partner is to receive an equal capital interest - goodwill approach. C. Assuming that Coco and Martin agree that each partner is to receive an equal capital interest - bonus approach.
The K & L Partnership was established since 2005. On January 1, 2015, the partners agree to admit partner (M). Capital account balances and profit and loss sharing ratios at January 1, 2015, before the admission of partner (M), are as follows: Partner (K) (30%) $63,000 Partner (L) (70%) $97,000 at the time of admission the following assets have a book value and fair value as: Book Value Fair value Inventory 100,000 120,000 Building 130,000 100,000 Partner (M) invested $120,000 cash to the partners for 40% of capital interest and the partners agree about assets revaluation. The capital balance of partner K after admission is a. $111,000. a. $111,000. b. $113,000. b. $113,000. c. $120,000. c. $120,000. d. $69,000.
The K & L Partnership was established since 2005. On January 1, 2015, the partners agree to admit partner (M). Capital account balances and profit and loss sharing ratios at January 1, 2015, before the admission of partner (M), are as follows: Partner (K) (30%) $63,000 Partner (L) (70%) $97,000 at the time of admission the following assets have a book value and fair value as: Book Value Fair value Inventory 100,000 120,000 Building 130,000 100,000 Partner (M) invested $120,000 cash to the partners for 40% of capital interest and the partners agree about assets revaluation. The journal entry to record the goodwill is a. Dr. Goodwill $35,000 / Cr. (M) capital $35,000. a. Dr. Goodwill $35,000 / Cr. (M) capital $35,000. b. Dr. Goodwill $30,000 /Cr. (K) capital $9,000, (L)…
The K & L Partnership was established since 2005. On January 1, 2015, the partners agree to admit partner (M). Capital account balances and profit and loss sharing ratios at January 1, 2015, before the admission of partner (M), are as follows: Partner (K) (30%) $63,000 Partner (L) (70%) $97,000 at the time of admission the following assets have a book value and fair value as: Book Value Fair value Inventory 100,000 120,000 Building 130,000 100,000 Partner (M) invested $120,000 cash to the partners for 50% of capital interest and the partners agree about assets non-revaluation. The journal entry to record the admission of partner (M) is a. Dr. Cash $120,000/Cr. (K) capital $6,000, (L) capital $14,000, (M) capital $100,000. a. Dr. Cash $120,000/Cr. (K) capital $6,000, (L)…
The K & L Partnership was established since 2005. On January 1, 2015, the partners agree to admit partner (M). Capital account balances and profit and loss sharing ratios at January 1, 2015, before the admission of partner (M), are as follows: Partner (K) (30%) $63,000 Partner (L) (70%) $97,000 at the time of admission the following assets have a book value and fair value as: Book Value Fair value Inventory 100,000 120,000 Building 130,000 100,000 Partner (M) invested $120,000 cash to the partners for 50% of capital interest and the partners agree about assets non-revaluation. The capital balance of partner L after admission is a. $97,000. a. $97,000. b. $90,000. b. $90,000. c. $80,000. c. $80,000. d. $83,000.
PROBLEM 1On June 30, 20x8 A, the sole proprietor of A Inc, expandsthe company and establishes a partnership with B and C. Thepartners plan to share profits and losses as follows: A, 50%;B, 25% and C 25%. They also agree that the beginning capitalbalances of partnership will reflect this same relationship.A asked B to join the partnership because his many businesscontacts are expected to be valuable during the expansion. B iscontributing P40,000 and a building that has an original cost ofP520,000, book value of P420,000, tax assessment of P310,000 andfair value of P370,000. The building is subject to a P242,000mortgage that the partnership will assume. C is contributingP66,000 and marketable securities costing P252,000 but arecurrently worth P345,000.A's investment in the partnership is his business. He plansto pay off the notes with his personal assets. The other partnershave agreed that the partnership will assume the accounts payable.The balance sheet for the A Inc follows:…
AA and BB entered into partnership on March 1, 2022 by investing the following assets: AA BB Cash P 30,000 Inventory P 90,000 Equipment 160,000 Furniture 200,000 The agreement between AA and BB provides that profits and losses are to be divided 40% and 60%, respectively, and that the partnership is to assume liability on the equipment of P60,000. The partners further agree that BB is to receive a capital credit equal to his profit and loss ratio. How much is the cash to be invested by BB?
X and Y PartnershipX and Y are in partnership and divide profits and losses in the ratio of 2:1 respectively. Z was admitted as a partner on 1 March 2020. The new profit-sharing ratio between X, Y and Z will be 4:2:1 respectively.X AND Y PARTNERSHIPSTATEMENT OF FINANCIAL POSITION AT 29 FEBRUARY 2020RASSETSNon-current assetsProperty, plant and equipment 60 000Current assets 180 000Inventories 88 000Trade and other receivables 52 000Cash and cash equivalents 40 000Total assets 240 000EQUITY AND LIABILITIESCapital & Reserves 200 000Capital X 127 500Capital Y 67 500General Reserve 5 000Current liabilitiesTrade and other payables 40 000Total equity and liabilities 240 000Additional information:For the purpose of the change in ownership the following agreement was reached:1. Provision would be made for credit losses at 10% of the outstanding (carrying) amount of the accounts receivable.2. Inventories would be valued at R90 000.3. Land and buildings would be valued at the market value of…
10. On October 1, A and B pooled their assets to form a Partnership, with the firm to take over the business assets and assume liabilities. Partners capitals are to be based on net assets transferred after the following adjustments. The partners agreed to the following adjustments: A’s inventory is to be increased by P15,000, while B’s inventory has a current fair market value of P100,000 and an agreed value of P110,000. B’s unadjusted inventory amounted to P90,000. Machinery and equipment are over-depreciated by P5,000 and P8,000 for A and B, respectively. Furnitures and fixtures for partner A has a current fair market value of P60,000 and an agreed value of P50,000. Furnitures and fixtures is carried at its cost amounting to P100,000 with accumulated depreciation of P45,000. Accrued rent income of P10,000 for A, and accrued salaries of P5,000 for B should be recognized on their respective books. The individual trial balances on October 1, before adjustments, follow: DESCRIPTION…
In the January 1, 2020 Kalaw and Borromeo formed partnership with each contributing the following: Kalaw Borromeo Cash 50,000 70,000 Equipments 50,000 75,000 Building 225,000 Furniture 10,000 Accounts payable 20,000 Loans Payable 100,000 All liabilities are to be assumed by the partnership. The partners agreed the equipments should be provided a 20% depreciation and the building has a market value of 200,000. The value of the furniture should be decreased by P2,000 There is an unrecorded liability in the books of Kalaw amounting to P2,000 and accrued interest on loans to Borromeo amounting to 5% of the loans. How much is the total capital of the partners before the agreed adjustments