Using the attached information, the simple journal entries to record the partners’ contributions include A.a debit to mortgage payable for P40,000.B.a credit to loan payable for P80,000..C.a P60,000 credit to cash.D.a P60,000 debit to C's capital account. A, B and C formed a partnership. Their contributions are as follows:ABCashEquipment80,00020,000 200,000160,000Totals80,000200,000180,000Additional information:Although C has contributed the most cash to the partnership, he did not have the full amount of P200,000available and was forced to borrow P80,000.The equipment contributed by B has an unpaid mortgage of P40,000, the repayment of which is assumedby the partnership.• The partners agreed to equalize their interest. Cash settlements among the partners are to be made outsidethe partnership.

Working Notes :- The partners agreed to…

Answered: Using the attached information, the…

Business

Accounting

Using the attached information, the simple journal entries to record the partners’ contributions i

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Concept explainers

Partnership Accounting

A partnership is a kind of arrangement between two or more people whereby they agree to manage the business operations and share its profits and losses in an agreed ratio between them. The agreement that is drafted and signed by the partners of the firm is termed as partnership deed and contains various important clauses agreed between the partners such as profit/loss sharing, interest on capital, remuneration allocation of each partner, drawings, admission of a new partner, etc.

Partner Admission and Withdrawal

A partnership is a kind of arrangement between two or more people whereby they agree to manage the business operations and share its profits and losses in an agreed ratio between them. The agreement that is drafted and signed by the partners of the firm is termed as a partnership deed and contains various important clauses agreed between the partners such as profit/loss sharing, interest on capital, remuneration allocation of each partner, drawings of a partner, etc.

Question

Using the attached information, the simple journal entries to record the partners’ contributions include

A.
a debit to mortgage payable for P40,000.
B.
a credit to loan payable for P80,000.
.C.
a P60,000 credit to cash.
D.
a P60,000 debit to C's capital account.

A, B and C formed a partnership. Their contributions are as follows:
A
B
Cash
Equipment
80,000
20,000 200,000
160,000
Totals
80,000
200,000
180,000
Additional information:
Although C has contributed the most cash to the partnership, he did not have the full amount of P200,000
available and was forced to borrow P80,000.
The equipment contributed by B has an unpaid mortgage of P40,000, the repayment of which is assumed
by the partnership.
• The partners agreed to equalize their interest. Cash settlements among the partners are to be made outside
the partnership.

Definition Definition Method of recording financial transactions in the book of original entry by debiting and crediting the accounts affected by a transaction using the golden rules of accrual accounting.

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