A Sole Proprietor and an Individual with No Business Form a Partnership On Apr. 8, 2012,...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
A Sole Proprietor and an Individual with No Business Form a Partnership On Apr. 8, 2012, Pascua who has her own retail business and Dela Cruz, decided to form a partnership wherein they will divide profits in the ratio of 40:60, respectively. The statement of financial position of Pascua is as follows: Pascua Marketing Statement of Financial Position April 8, 2012 Assets -Cash Accounts Receivable. Less: Allowance for Uncollectible Accounts Inventory Equipment Less: Accumulated Depreciation Total Assets Liabilities and Capital Accounts Payable. Pascua, Capital Total Liabilities and Capital P160,000 16,000 P 50,000 10,000 P 4,000 144,000 200,000 40,000 P388,000 P 36,000 352,000 P388,000 Conditions agreed upon before the formation of the partnership: a. The accounts receivable of Pascua is estimated to be 70% realizable. b. The accumulated depreciation of the equipment will be increased by P10,000. c. The accounts payable will be assumed by the partnership. d. The capital of the partnership is based on the adjusted capital balance of Pascua. Dela Cruz is to contribute cash in order to make the partner's capital balances proportionate to the profit and loss ratio. Required: 1. Prepare the necessary journal entries in the books of Pascua. 2. Prepare the opening journal entries in the books of the partnership. A Sole Proprietor and an Individual with No Business Form a Partnership On Apr. 8, 2012, Pascua who has her own retail business and Dela Cruz, decided to form a partnership wherein they will divide profits in the ratio of 40:60, respectively. The statement of financial position of Pascua is as follows: Pascua Marketing Statement of Financial Position April 8, 2012 Assets -Cash Accounts Receivable. Less: Allowance for Uncollectible Accounts Inventory Equipment Less: Accumulated Depreciation Total Assets Liabilities and Capital Accounts Payable. Pascua, Capital Total Liabilities and Capital P160,000 16,000 P 50,000 10,000 P 4,000 144,000 200,000 40,000 P388,000 P 36,000 352,000 P388,000 Conditions agreed upon before the formation of the partnership: a. The accounts receivable of Pascua is estimated to be 70% realizable. b. The accumulated depreciation of the equipment will be increased by P10,000. c. The accounts payable will be assumed by the partnership. d. The capital of the partnership is based on the adjusted capital balance of Pascua. Dela Cruz is to contribute cash in order to make the partner's capital balances proportionate to the profit and loss ratio. Required: 1. Prepare the necessary journal entries in the books of Pascua. 2. Prepare the opening journal entries in the books of the partnership.
Expert Answer:
Related Book For
Income Tax Fundamentals 2013
ISBN: 9781285586618
31st Edition
Authors: Gerald E. Whittenburg, Martha Altus Buller, Steven L Gill
Posted Date:
Students also viewed these accounting questions
-
Partners Chito and Ditas share profits in the ratio of 6:4, respectively. On December 31, 2012, their capital balances were: Chito, P120,000 and Ditas, P100,000. On that date, Meng was admitted as...
-
Ms. Marilyn Johnson is an attorney who has her own practice located in the South Bronx on 163 Street and Morris Avenue. She specializes in immigration, divorce, and accidents. There are a number of...
-
Weiskopf, a sole proprietor and a calendar-year taxpayer, purchased $60,000 of equipment during 2015, as follows: Weiskopfs CPA, to maximize the depreciation deduction, elects $25,000 of Sec. 179...
-
How are Recovery Audit Contractors paid? Question 23 options: RACs are reimbursed $100,000 annually RACs are reimbursed on a contingency-based system RACs are paid on a contract basis RACs are not...
-
The trial balance columns of the worksheet for Tinoisamoa Company at June 30, 2012, are as follows. Other data:1. A physical count reveals $500 of supplies on hand.2. $100 of the unearned revenue is...
-
1. The data transmission cost in a client server model is measured by gigabytes/dollar. Suppose the download cost is 20 gigabytes/dollar while the upload cost is 15 gigabytes/dollar. In order to...
-
On December 2, 2006, Pfizer Inc. announced that it was immediately discontinuing clinical trials of its Torcetrapib drug. Subsequent clinical results showed that patients taking the drug suffered a...
-
Under what conditions is an employer required to accrue a liability for sick pay? Under what conditions is an employer permitted but not required to accrue a liability for sick pay?
-
Amber Furniture has projected sales of its product for the next six months as follows. January 100 units February 120 units March 250 units April 170 units May 125 units June 110 units The product...
-
For each scenario below, identify which sampling method was used. Explain your reasoning. a) A dean decided to assess students' views on the school cafeteria's food. To do so, the dean randomly...
-
kNN performs much better if all of the data have the same scale
-
What factors affect the trade-off between valuation and terms?
-
Why do investors often syndicate their deals? When do they invest alone?
-
How do companies structure employee stock option plans?
-
What are the pros and cons of soliciting an investment from a competing syndicate?
-
What are the main components of a limited partnership agreement (LPA)? Why is it needed?
-
1. Using the Transformer Law, calculate the output current from a transformer with an output voltage of 1,200 V and a supplied voltage of 16 and supplied amperes of 4.
-
According during to the IRS, individuals filing federal income tax returns prior to March 31 received an average refund of $1,088 in 2018. Consider the population of "last-minute" filers who mail...
-
Frank, age 35, and Joyce, age 34, are married and file a joint income tax return for 2012. Their salaries for the year total $83,000 and they have taxable interest income of $4,000. They have no...
-
For each of the following situations, indicate whether the taxpayer(s) is (are) required to file a tax return for 2012. Explain your answer. a. Helen is a single taxpayer with interest income in 2012...
-
Frank Willingham has the following transactions during the year: Sale of office equipment on March 15 that cost $20,000 when purchased on July 1, 2010. Frank has claimed $5,000 in depreciation and...
-
The following data relate to three independent production periods of Randolph Manufacturing Company. Missing data are indicated by question marks. Required Using the above data, determine the missing...
-
Travis Manufacturing Company uses the perpetual inventory system to record transactions related to its manufacturing inventories. The following transactions occurred during August 2019: Aug. 5...
-
Porter Manufacturing Company uses the perpetual inventory system to account for its manufacturing inventories. The following are Porters transactions during September 2019: Sept. 5 Received materials...
Study smarter with the SolutionInn App