On April 1, 2020, Anne invited Mary to form a partnership. The partnership will be known...
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On April 1, 2020, Anne invited Mary to form a partnership. The partnership will be known as Anne & Mary Catering Services. Anne will transfer her business' assets at agreed valuation to the partnership. Anne & Mary Catering Services will assume the existing firm's liabilities. Anne's Agreed Valuation Ledger Balances P 25,000 Cash 25,000 Accounts Receivable 75,000 75,000 Allowance for Doubtful Accounts 5,000 7,500 Catering Supplies Inventory 10,000 15,000 Catering Utensils and Equipment 120,000 110,000 Accumulated Depreciation 6,700 Accounts Payable 8,000 8,000 Mary will invest enough cash to give her 1/3 interest on the partnership's total capitalization. Required: (1) Compute the adjusted capital balance of Anne upon formation of the partnership. (2) Compute the cash investment of Mary upon formation of the partnership. (3) Prepare the initial statement of financial position for the newly formed partnership AM Catering Services as of April 1, 2020. On April 1, 2020, Anne invited Mary to form a partnership. The partnership will be known as Anne & Mary Catering Services. Anne will transfer her business' assets at agreed valuation to the partnership. Anne & Mary Catering Services will assume the existing firm's liabilities. Anne's Agreed Valuation Ledger Balances P 25,000 Cash 25,000 Accounts Receivable 75,000 75,000 Allowance for Doubtful Accounts 5,000 7,500 Catering Supplies Inventory 10,000 15,000 Catering Utensils and Equipment 120,000 110,000 Accumulated Depreciation 6,700 Accounts Payable 8,000 8,000 Mary will invest enough cash to give her 1/3 interest on the partnership's total capitalization. Required: (1) Compute the adjusted capital balance of Anne upon formation of the partnership. (2) Compute the cash investment of Mary upon formation of the partnership. (3) Prepare the initial statement of financial position for the newly formed partnership AM Catering Services as of April 1, 2020.
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Calculation of Partneships Capitalization Particulars Amount Valuation of Assets Cash 25000 Accoun... View the full answer
Related Book For
Intermediate Accounting Volume 1
ISBN: 978-1119496496
12th Canadian edition
Authors: Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield, Irene M. Wiecek, Bruce J. McConomy
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