For Zaikee - Activity 1
For Zaikee - Activity 1
For Zaikee - Activity 1
The following are the accounts at their normal balances of X, a single proprietorship prior to its
conversion into a partnership:
Account Receivable P50,000
Allowance for Doubtful Accounts 1,000
Equipment 60,000
Accumulated Depreciation - Equipment 20,000
Notes Payable 30,000
X, Capital 59,000
X admits Y as a partner in the partnership with a total agreed capitalization of P200,000, and Y
contributes cash that will give him 50% claim in the partnership. X will invest additional cash after the
proprietorship’s assets and liabilities are adjusted per agreement as follows:
a. The realizable amount of Accounts Receivable is P45,000.
b. The Equipment is to be stated at its depreciated value of P34,000.
c. Accrued interest of P1,000 on the Notes Payable should be recognized.
Required:
A. Journalize the adjustments in the book of X.
a. X, Capital 4,000
Allowance for Doubtful Accounts 4,000
(P50,000 – (45,000 – 1,000))
b. X, Capital 6,000
Accumulated Depreciation – Equipment 6,000
(P60,000 – (34,000 – 20,000))
c. X, Capital 1,000
Accrued Interest 1,000
B. Prepare the journal entry to close the single proprietorship’s books after adjustments are
effected.
Cash 52,000
X, Capital 52,000
D. Prepare the journal entry to record the investment of Y in the partnership.
Cash 100,000
Y, Capital 100,000
X and Y Partnership
Statement of Financial Position
As of MM/DD/YYYY
ASSETS
Cash (100,000 + 52,000) P152,000
Accounts Receivable 50,000
Less: Allowance for Doubtful Accounts P5,000 45,000
Equipment 60,000
Less: Accumulated Depreciation – Equipment 26,000 34,000
Total Assets P231,000