The following transactions occurred in the formation of Enercon Service Makers partnership: 1. Perez made a cash investment of P500,000. 2. Tiu invested equipment costing P800,000 with a current market value of P700,000 with an outstanding mortgage of P200,000 with ABC bank. The partnership will assume the mortgage. 3. Ruiz will be admitted as the manager with 20% share in the profit. 4. The partnership earned service fee of P400,000 and paid operating expenses totaling P150,000. 5. Perez and Tiu withdrew P 20,000 each while Ruiz was paid salary of P30,000. Required: a. Prepare journal entries to record the above transactions b. Prepare the Statement of Partners' Equity; the Net Income is to be divided as follows: 20% to Ruiz and the Balance divided equally between Perez & Tiu.
The following transactions occurred in the formation of Enercon Service Makers partnership: 1. Perez made a cash investment of P500,000. 2. Tiu invested equipment costing P800,000 with a current market value of P700,000 with an outstanding mortgage of P200,000 with ABC bank. The partnership will assume the mortgage. 3. Ruiz will be admitted as the manager with 20% share in the profit. 4. The partnership earned service fee of P400,000 and paid operating expenses totaling P150,000. 5. Perez and Tiu withdrew P 20,000 each while Ruiz was paid salary of P30,000. Required: a. Prepare journal entries to record the above transactions b. Prepare the Statement of Partners' Equity; the Net Income is to be divided as follows: 20% to Ruiz and the Balance divided equally between Perez & Tiu.
SWFT Essntl Tax Individ/Bus Entities 2020
23rd Edition
ISBN:9780357391266
Author:Nellen
Publisher:Nellen
Chapter14: Partnerships And Limited Liability Entities
Section: Chapter Questions
Problem 2BD
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Transcribed Image Text:The following transactions occurred in the formation of Enercon
Service Makers partnership:
1. Perez made a cash investment of P500,000.
2. Tiu invested equipment costing P800,000 with a current
market value of P700,000 with an outstanding mortgage of
P200,000 with ABC bank. The partnership will assume the
mortgage.
3. Ruiz will be admitted as the manager with 20% share in the
profit.
4. The partnership earned service fee of P400,000 and paid
operating expenses totaling P150,000.
5. Perez and Tiu withdrew P 20,000 each while Ruiz was paid
salary of P30,000.
Required:
a. Prepare journal entries to record the above transactions
b. Prepare the Statement of Partners' Equity; the Net Income is
to be divided as follows: 20% to Ruiz and the Balance divided
equally between Perez & Tiu.
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