On October 1, 2024, J and K decided to pool their assets and form a partnership.

They allocate profit and loss in the ratio o

a. J's inventory amounting to 12,000 is worthless, while K's agreed value of inventory amounted to 150,000.
b. Uncollectibel accounts of 7,200 for j is to be provided; a 5% allowance is to be recognized in the books of k.
c. accrued rent income of 12,000 on j, and accrued salaries of 9,600 on k should be recognized on their respective books.
d. interest at 16% on notes receivable dated august 17, 2024 should be accrued
e. the office supplies unused amounted to 24,000
f. the equipment's agreed value amounted to 60,000
g. the furniture and fixtures has a fair market value of 108,000
h. interest at 12% on notes payable dated july 1, 2024 should be accrued.
i. K has an unrecorded patent amounting to 48,000 and is to invest the additional cash necessary to have a 60% interest in

Required:
1. Prepare the following entries in the books of J and K:
a. Adjusting
B. Closing
2. Prepare the following entries in the new set of books, as investments (or withdrawal, if any) made by the respective par
3. Determine the following:
a. Net adjusment in the books of J andK (identify net debit or net credit adjusments)
b. The adjusted capital of J and K in their respective books
c. The additional Investment made by K
4. Prepare the balance sheet after the formation of the partnership.

1.a Books of J Books of K

a. j, capital 12,000.00 a. Merch inv.
Merch inv. 12,000.00 K, capital
b. j, capital 7,200.00 b. k, capital
Allow. For DA 7,200.00 Allow. For DA
A/R
%
adjusted allow
unadjusted allow
net increase

c. Rent receivable 12,000.00 c. k, capital

j, capital 12,000.00 Salaries Payable
d. interest receivable
k, capital
(60,000 x 16% x 45/360)
e j, capital 8,400.00
Office supplies 8,400.00
unadjusted 32,400.00
adjusted 24,000.00
net decrease/expired 8,400.00

f. j, capital
accum dep - equi
equi 120,000.00
 unadjusted accum dep - 54,000.00
net equi 66,000.00
revaluation 60,000.00
net increase 6,000.00

g. k, capital
accum dep - f&f
f&f
unadjusted accum dep
net f&f
revaluation
net increase

h. j, capital 1,800.00
interest payable 1,800.00
(60000 x 12% x 90/360)
i. patent
k, capital

Balance Sheet
Cash
A/R
Allowance for DA
N/R
rent receivable
interest receivable
Merch Inv
Office Supplies
equipment
f&f
Patent
Total Assets

A/P
N/P
Interest Payable
Salaries Payable
j, capital
k, capital
Total Liabilities and Equities
 rofit and loss in the ratio of 44:56 for J and K respectively. The firm is to take over business assets and assume business liabilities, and c

to 150,000. Accounts
he books of k. Cash
n their respective books. Accounts Receivable
Allowance for doubtful accounts
Notes Receivable
Merchandise Inventory
Office Supplies
Equipment
to have a 60% interest in the new firm Accumulated Depreciation-Equipment
Furniture and Fixtures
Accumulated Depreciation-F&F
Tot al Assets
Accounts Payable
Notes Payable
made by the respective partners Capitals
Total Liabilities and Capital

Books of K j adjusments
6,000.00 unadjusted capital
6,000.00 a. merch exp
3,000.00 b. aloow for DA
3,000.00 c. acc. Rent
180,000.00 e. Office sup exp
5% f. additional dep
9,000.00 h. int payable
6,000.00 3.a net credit (debit)
3,000.00 3.b adjusted Capital

9,600.00
9,600.00
1,200.00
1,200.00 1.b Books of J
% x 45/360) Allow for DA
accum dep - equi
A/P
N/P
interest payable
j, capital
Cash
A/R
Merch Inv
Office Supplies
 equipment
rent receivable

2 Books of J
Cash
12,000.00 A/R
12,000.00 Merch Inv
144,000.00 Office Supplies
- 24,000.00 equipment (net)
120,000.00 rent receivable
108,000.00 Allow for DA
12,000.00 A/P
N/P
interest payable
j, capital

48,000.00 3.c Total Agreed Capital (348,600/40%)

48,000.00 percentage required
Required K, capital
K, capital , beg.
Additional Cash investment

204,300.00
396,000.00
- 21,000.00
60,000.00
12,000.00
1,200.00
330,000.00
24,000.00
60,000.00
108,000.00
48,000.00
1,222,500.00

279,600.00
60,000.00
1,800.00
9,600.00
348,600.00
522,900.00
1,222,500.00
nd assume business liabilities, and capitals are to be based on net assets transfered after the following adjustmenst.

J K
90,000.00 54,000.00
216,000.00 180,000.00
tful accounts - 4,800.00 - 6,000.00
60,000.00
192,000.00 144,000.00
32,400.00
120,000.00
ciation-Equipment - 54,000.00
144,000.00
- 24,000.00
591,600.00 552,000.00
159,600.00 120,000.00
60,000.00
372,000.00 432,000.00
591,600.00 552,000.00

k adjusments
372,000.00 unadjusted capital 432,000.00
- 12,000.00 a. merch reval 6,000.00
- 7,200.00 b. allow for DA - 3,000.00
12,000.00 c. salaries payable - 9,600.00
- 8,400.00 d. int rec 1,200.00
- 6,000.00 g. additional dep - 12,000.00
- 1,800.00 i. patent inv 48,000.00
- 23,400.00 net credit (debit) 30,600.00
348,600.00 adjusted Capital 462,600.00

Books of J Books of K
12,000.00 Allow for DA 9,000.00
60,000.00 accum dep - f&f 36,000.00
159,600.00 A/P 120,000.00
60,000.00 Salaries Payable 9,600.00
1,800.00 k, capital 462,600.00
348,600.00 Cash 54,000.00
90,000.00 A/R 180,000.00
216,000.00 Merch Inv 150,000.00
180,000.00 Patent Invest 48,000.00
Office Supplies 24,000.00 interest rec 1,200.00
equipment 120,000.00 Notes Rec 60,000.00
rent receivable 12,000.00 F&F 144,000.00

Books of J Books of K
90,000.00 Cash 54,000.00
216,000.00 A/R 180,000.00
180,000.00 Merch Inv 150,000.00
24,000.00 Patent Invest 48,000.00
60,000.00 interest rec 1,200.00
12,000.00 Notes Rec 60,000.00
12,000.00 F&F 108,000.00
159,600.00 Allow for DA 9,000.00
60,000.00 A/P 120,000.00
1,800.00 Salaries Payable 9,600.00
348,600.00 k, capital 462,600.00

(348,600/40%) 871,500.00
60%
522,900.00
462,600.00
60,300.00
justmenst.