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    August 11 Partnership Formation

    Uploaded by

    Vivienne Rozenn Layto
    - Partners J and K formed a partnership, with J contributing P120,000 cash and K contributing P60,000 cash - Various adjusting and closing entries were made for the partnership's first accounting period - A statement of financial position was prepared showing the partnership's assets, liabilities, and capital accounts for J and K

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    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd

    August 11 Partnership Formation

    Uploaded by

    Vivienne Rozenn Layto
    22 views36 pages
    - Partners J and K formed a partnership, with J contributing P120,000 cash and K contributing P60,000 cash - Various adjusting and closing entries were made for the partnership's first accounting period - A statement of financial position was prepared showing the partnership's assets, liabilities, and capital accounts for J and K

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    Original Title

    August 11 Partnership Formation.xlsx

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    - Partners J and K formed a partnership, with J contributing P120,000 cash and K contributing P60,000 cash - Various adjusting and closing entries were made for the partnership's first accounting period - A statement of financial position was prepared showing the partnership's assets, liabilities, and capital accounts for J and K

    Copyright:

    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
    Download as xlsx, pdf, or txt
    22 views36 pages

    August 11 Partnership Formation

    Uploaded by

    Vivienne Rozenn Layto
    - Partners J and K formed a partnership, with J contributing P120,000 cash and K contributing P60,000 cash - Various adjusting and closing entries were made for the partnership's first accounting period - A statement of financial position was prepared showing the partnership's assets, liabilities, and capital accounts for J and K

    Copyright:

    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
    Download as xlsx, pdf, or txt
    of 36

    A and B formed a partnership.

    A contributed P100,000 cash, B contri

    Cash
    A, capital
    B, capital

    Cash
    Land
    A capital
    B capital

    Problem 1
    Requiremetn 1
    Cash
    Inventory
    Equipment
    A, capital

    Cash
    Land
    Building
    Mortgage payable
    B, capital
    Statement of Financial Position

    Assets:
    Cash
    Inventory
    Equipment
    Land
    Building
    Total assets

    Liabilities and capital:


    Mortgage payable
    A, capital
    B, capital
    Total liabilities and capital

    Requirement 2

    Cash
    Inventory
    Equipment
    A, capital
    Cash
    Land
    Building
    Mortgage payable
    B, capital

    Partner A
    Partner B
    Total capital

    BONUS METHOD

    B, capital
    A, capital

    Assets:
    Cash
    Inventory
    Equipment
    Land
    Building
    Total assets

    Liabilities and capital:


    Mortgage payable
    A, capital
    B, capital
    Total liabilities and capital
    ash, B contributed P150,000 cash.
    Debit Credit
    250,000.00
    100,000.00
    150,000.00

    150,000.00
    300,000.00
    150,000.00
    300,000.00

    120,000.00
    120,000.00
    240,000.00
    480,000.00

    120,000.00
    240,000.00
    480,000.00
    240,000.00
    600,000.00
    240,000.00
    120,000.00
    240,000.00
    240,000.00
    480,000.00
    1,320,000.00

    240,000.00
    480,000.00
    600,000.00
    1,320,000.00

    120,000.00
    120,000.00
    240,000.00
    480,000.00
    120,000.00
    240,000.00
    480,000.00
    240,000.00
    600,000.00

    Contributed
    capital BONUS Agreed capital
    480,000.00 60,000.00 540,000.00
    600,000.00 (60,000.00) 540,000.00
    1,080,000.00 - 1,080,000.00

    60,000.00
    60,000.00

    240,000.00
    120,000.00
    240,000.00
    240,000.00
    480,000.00
    1,320,000.00

    240,000.00
    540,000.00
    540,000.00
    1,320,000.00
    Requirement 1 (Bonus Method)

    Cash
    John capital

    Equipment
    Note payable
    Jeff capital

    John, capital
    Jeff, capital
    Jane capital

    John
    Jeff
    Jane
    Total

    Requirement 2 (Goodwill Method)


    Cash
    John capital

    Equipment
    Note payable
    Jeff capital

    Goodwill
    Jane, capital

    John
    Jeff
    Jane
    Total
    100,000.00
    100,000.00

    110,000.00
    30,000.00
    80,000.00

    40,000.00
    20,000.00
    60,000.00

    contributed Bonus Agreed


    100,000.00 (40,000.00) 60,000.00
    80,000.00 (20,000.00) 60,000.00
    - 60,000.00 60,000.00
    180,000.00 - 180,000.00
    100,000.00
    100,000.00

    110,000.00
    30,000.00
    80,000.00

    90,000.00
    90,000.00

    contributed Goodwill Agreed


    100,000.00 100,000.00
    80,000.00 80,000.00
    - 90,000.00 90,000.00
    180,000.00 90,000.00 270,000.00
    Adjust the book of H (sole proprietor)
    ADJUSTING ENTRIES

    H, capital
    Allowance for D/A

    Accounts receivable
    Realizable value
    Required allowance
    Book value of allowance
    increase

    Interest Receivable (60,000 x 8% x 9/12)


    H, capital

    H, capital
    Merchandise Inventory (27,000 - 21,000)

    Cost
    Accumulated Depreciation
    Book value
    H, capital
    Accumulated Depreciation

    Prepaid Expense
    H capital

    H, capital
    Accrued expense

    CLOSING ENTRIES

    Allowance for D/A


    Accumulated Depreciation
    Accrued Expense
    Accounts Payable
    Notes payable
    H, capital
    Interest Receivable
    Prepaid expense
    Cash
    Accounts receivable
    notes receivable
    merchandise Inventory
    Equipment

    BOOK OF PARTNERSHIP
    Cash
    Accounts receivable
    Notes receivable
    Merchandise inventory
    Equipment (net)
    Interest receivable
    Prepaid expense
    Allowance for D/A
    Accounts payable
    Accrued expense
    Notes payable
    H, capital

    H, capital
    I, capital
    Total

    Cash
    I, capital
    to record the contribution of I in order to give 1/3 interest

    I is to invest cash equal to 1/3 of H's adjusted capital

    Cash
    I, capital

    H and I Partnership
    Statement of Financial Position
    November 30, 20x4
    Assets:
    Cash
    Accounts receivable
    Less: Allowance for doubtful accounts
    Notes receivable
    Merchandise inventory
    Equipment (net)
    Interest receivable
    Prepaid expense
    Total Assets

    Liabilities and capital


    Accounts payable
    Accrued expense
    Notes payable
    H, capital
    I, capital
    Total liabilities and capital
    S
    Debit Credit
    1,800.00
    1,800.00

    48,000.00
    43,200.00
    4,800.00
    3,000.00
    1,800.00

    3,600.00
    3,600.00

    6,000.00
    6,000.00

    Agreed
    72,000.00 72,000.00
    6,000.00 10,800.00
    66,000.00 61,200.00
    4,800.00
    4,800.00

    2,400.00
    2,400.00

    7,200.00
    7,200.00

    4,800.00
    10,800.00
    7,200.00
    12,000.00
    60,000.00
    232,200.00
    3,600.00
    2,400.00
    120,000.00
    48,000.00
    60,000.00
    21,000.00
    72,000.00

    H capital
    246,000.00
    1,800.00
    3,600.00
    6,000.00
    4,800.00
    2,400.00
    7,200.00
    19,800.00 252,000.00
    232,200.00

    HIP
    120,000.00
    48,000.00
    60,000.00
    21,000.00
    61,200.00
    3,600.00
    2,400.00
    4,800.00
    12,000.00
    7,200.00
    60,000.00
    232,200.00

    232,200.00 2/3
    116,100.00 1/3
    348,300.00 100%

    116,100.00
    116,100.00

    77,400.00
    77,400.00

    osition
    236,100.00
    48,000.00
    (4,800.00)
    60,000.00
    21,000.00
    61,200.00
    3,600.00
    2,400.00
    427,500.00

    12,000.00
    7,200.00
    60,000.00
    232,200.00
    116,100.00
    427,500.00
    a.

    b.

    c.

    d.

    e
    f

    h
    i
    J, capital
    Merchandise Inventory

    Merchandise Inventory
    K, capital

    J, capital
    Allowance for D/A

    180,000 * 5% = P9,000

    Accrued Income
    J, capital

    K, capital
    Salaries payable

    Interest receivable
    K, capital
    60,000 * 16% * 43/360

    J, capital
    Office supplies

    J, capital
    Accumulated depreciation

    cost
    Accumulated depreciation
    Book value

    K, capital
    Accumulated depreciation

    cost
    Accumulated depreciation
    Book value

    J, capital
    Interest Payable
    60,000 * 12% * 90/360
    Patent
    K, capital
    J
    K
    Total

    Additional cash investment - K


    Book of J
    Debit Credit
    12,000.00
    12,000.00

    2,400.00
    2,400.00

    12,000.00
    12,000.00

    8,400.00
    8,400.00

    6,000.00
    6,000.00

    120,000.00 120,000.00
    54,000.00 60,000.00
    66,000.00 60,000.00

    144,000.00 144,000.00
    24,000.00 36,000.00
    120,000.00 108,000.00

    1,800.00
    1,800.00
    J, capital
    372,000.00
    12,000.00
    2,400.00
    12,000.00

    8,400.00
    6,000.00

    1,800.00
    - -
    30,600.00 384,000.00 -
    353,400.00

    18,600.00
    debit
    capital
    353,400.00 40%
    530,100.00 60%
    883,500.00 100%

    67,553.33
    Book of K
    Debit Credit

    6,000.00
    6,000.00

    3,000.00
    3,000.00

    9,600.00
    9,600.00

    1,146.67
    1,146.67
    12,000.00
    12,000.00
    48,000.00
    48,000.00

    K, capital
    432,000.00
    6,000.00
    3,000.00
    9,600.00
    1,146.67

    12,000.00

    - 48,000.00
    24,600.00 487,146.67
    462,546.67

    30,546.67
    credit

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