21 Chapter 1 - Accounting, for Partnership Formation & Operation Accounts Malachi Haggai Cash P136,000 P76,000 Accounts Receivable 88,000 48,000 Inventories 304,000 364,000 Machinery 480,000 440,000 Accounts Payable 216,000 144,000 Notes Payable 140,000 60,000 Malachi decided to pay-off his notes payable from his personal assets. It was also agreed that Haggai's inventories were overstated by P24,000 and Malachi machinery was over-depreciated P20,000. Haggai is to invest/ withdraw cash in order to receive a capital credit that is 20% more than Malachi's total net investment in the partnership. Immediately after the formation, compute for the following: . . . 1 1. Total cash of the partnership, 2. Total assets of the partnership. 3. Total capital of the partnership, PROBLEM 1 - 9 Bond This gals agolf of is adraft ed smoom gniniums On June 1, of the current year, Nikki and Ernest combined their separate business to form a partnership. The non-cash assets to be contributed and liabilities to be assumed are as follows: MONG Nikki Ernest Carrying Carrying Value . Fair Value Value Fair Value Accounts Receivable P25,000 P26,250 P20,000 P19,500 Inventory 40,000 45,000 20,000 20,750 PPE 100,000 91,250 86,250 82,250 Accounts Payable 15,000 15,000 11,250 11,250 Nikki and Ernest are to invest equal amounts of cash such that the contribution of Nikki would be 10% more than the investment of Ernest. Immediately after the formation, compute for the following: 1. Total cash of the partnership. 2. Total assets of the partnership. 3. Total capital of the partnership. 22 Chapter 1 - Accounting for Partnership Formation & Operation PROBLEM 1 - 10 On December 1, of the current year, James invited Lakers to join him in business. Lakers agreed provided that James will adjust the accumulated depreciation of his equipment account to certain amount, and will recognize additional accrued expenses of P10,000. After that, Lakers is to invest additional pieces of equipment to make his interest equal to 45%, The capital balance of James before and after adjustment were P139,000 and P121,000, respectively. What is the effect in the carrying value of equipment as a result of admission of Lakers? PROBLEM 1 - 11 On February 1, 2019, Flores, Gilroy, and Hansen began a partnership in which Flores and Hansen contributed cash of P25,000; Gilroy contribute property with a fair value of P50,000 and a tax basis P40,000. Gilroy receives a 5% bonus of partnership income. Flores and Hansen receive salaries of P10,000 each. The partnership agreement of Flores, Gilroy, and Hansen provides all partners to receive a 5% interest on capital and that profits and losses be divided of the remaining income be distributed to Flores, Gilroy, and Hansen by a 1:3:1 ratio. Required: 1. Prepare a schedule to distribute P50,000 partnership net income to the partners. 2. Prepare a schedule to distribute P20,000 partnership net loss to the partners. PROBLEM 1 - 12 Evans, Fitch, and Gault operate a partnership with a complex profit and loss sharing agreement. The average capital balance for each partner on December 31