October 1, 2019, Deku and Dabi decided to pool their assets and form a partnership. The...

 

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October 1, 2019, Deku and Dabi decided to pool their assets and form a partnership. The firm is to take over the business assets and assume business liabilities; equities are to be based on net assets transferred after the following adjustments: a. Dabi's inventory is to be valued at P350,000 b. An allowance for uncollectible accounts of P9,000 and P7,500, respectively should be set up. c. Accrued expenses of P21,000 are to be recognized on Deku's books. d. Dabi is to contribute sufficient cash to give him 60% interest in the new firm Statements of financial position for Deku and Dabi in October 1 before adjustments are presented below: Cash Accounts receivable Merchandise inventory Equipment Accum. Depr. - Equip. Total assets Accounts payable Capital Total liabilities and capital Deku 187,500 450,000 400,000 Dabi 112,500 375,000 300,000 300,000 (37,500) 250,000 (112,500) 1,175,000 1,050,000 345,000 830,000 1,175,000 250,000 800,000 1,050,000 Instructions: 1. Give the entries to adjust and close the books of Deku 2. Give the entries required on the books of Dabi upon the formation of the partnership 3. Prepare a statement of financial position for the new partnership of Deku and Dabi. October 1, 2019, Deku and Dabi decided to pool their assets and form a partnership. The firm is to take over the business assets and assume business liabilities; equities are to be based on net assets transferred after the following adjustments: a. Dabi's inventory is to be valued at P350,000 b. An allowance for uncollectible accounts of P9,000 and P7,500, respectively should be set up. c. Accrued expenses of P21,000 are to be recognized on Deku's books. d. Dabi is to contribute sufficient cash to give him 60% interest in the new firm Statements of financial position for Deku and Dabi in October 1 before adjustments are presented below: Cash Accounts receivable Merchandise inventory Equipment Accum. Depr. - Equip. Total assets Accounts payable Capital Total liabilities and capital Deku 187,500 450,000 400,000 Dabi 112,500 375,000 300,000 300,000 (37,500) 250,000 (112,500) 1,175,000 1,050,000 345,000 830,000 1,175,000 250,000 800,000 1,050,000 Instructions: 1. Give the entries to adjust and close the books of Deku 2. Give the entries required on the books of Dabi upon the formation of the partnership 3. Prepare a statement of financial position for the new partnership of Deku and Dabi.

Answer rating: 100% (QA)

1 Entries to adjust and close the books of Deku Accrued Expenses 21000 Accounts Payable Acc... View the full answer