Prepare the opening journal entries in the books of the partnership.
- On April 8, 2018, 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. Thestatement of financial position of Tolentino is as follows:
Tolentino Marketing
Statement of Financial Position
April 8, 2018
Assets
Cash P 4,000
Less: Allowance for Uncollectible Accounts 16,000 144,000
Inventory 200,000
Equipment P 50,000
Less:
Total Assets P 388,000
Liabilities and Capital
Accounts Payable P 36,000
Tolentino, Capital 352,000
Total Liabilities and Capital P 388,000
Conditions agreed upon before formation of the partnership:
- The accounts receivable of Tolentino is estimated to be 70% realizable.
- The accumulated depreciation of the equipment will be increased by P10,000.
- The accounts payable will be assumed by the partnership.
- 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.
Prepare the opening
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