1. Assume that on June 30, 2018, Gerry and Henry. competitors in business, decided to consolidate...
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1. Assume that on June 30, 2018, Gerry and Henry. competitors in business, decided to consolidate their business to form a partnership to be called GH Partnership. Their balance sheets on this date are shown below. Gerry Company Balance Sheet June 30, 2018 Assets Capital Cash payable Accounts receivable 26,000 Merchandise inventory Furniture and fixtures Total assets and capital Henry Company Balance Sheet June 30, 2018 Assets and Capital Cash P29.000 3,000 payable Accounts receivable Total assets and capital P6,000 Liabilities and P 5,000 Accounts 10,000 Gerry Capital 8,000 6.000 P29,000 Total liabilities Liabilities P4,000 Accounts 8,000 Henry capital 10,000 9.000 P31.000 Total liabilities 25,000 Merchandise inventory Furniture and fixtures P31,000 The conditions agreed by the partners for purposes of determining their interests in the partnership are presented below: a. 10% of accounts receivables is to be set up uncollectible in each book. b. Merchandise inventory of Henry is to be increased by P1,000. c. The furniture and fixtures of Gerry and Henry are to be depreciated by P600 and P900 respectively. Required: (15 points) 1. Prepare the necessary adjusting entries. 2. Prepare the opening journal entries in the books of the partnership. 3. Prepare the balance sheet of the partnership after the formation. 1. Assume that on June 30, 2018, Gerry and Henry. competitors in business, decided to consolidate their business to form a partnership to be called GH Partnership. Their balance sheets on this date are shown below. Gerry Company Balance Sheet June 30, 2018 Assets Capital Cash payable Accounts receivable 26,000 Merchandise inventory Furniture and fixtures Total assets and capital Henry Company Balance Sheet June 30, 2018 Assets and Capital Cash P29.000 3,000 payable Accounts receivable Total assets and capital P6,000 Liabilities and P 5,000 Accounts 10,000 Gerry Capital 8,000 6.000 P29,000 Total liabilities Liabilities P4,000 Accounts 8,000 Henry capital 10,000 9.000 P31.000 Total liabilities 25,000 Merchandise inventory Furniture and fixtures P31,000 The conditions agreed by the partners for purposes of determining their interests in the partnership are presented below: a. 10% of accounts receivables is to be set up uncollectible in each book. b. Merchandise inventory of Henry is to be increased by P1,000. c. The furniture and fixtures of Gerry and Henry are to be depreciated by P600 and P900 respectively. Required: (15 points) 1. Prepare the necessary adjusting entries. 2. Prepare the opening journal entries in the books of the partnership. 3. Prepare the balance sheet of the partnership after the formation.
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Related Book For
Advanced Accounting
ISBN: 978-1259444951
13th edition
Authors: Joe Ben Hoyle, Thomas Schaefer, Timothy Doupni
Posted Date:
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