Dexter and Dora agree to form a partnership to buy and sell tuna. Dexter contributes P350,000 cash and Dora contributes P120,000 cash and a delivery vehicle worth P750,000, which has a mortgage of P400,000. The partnership will assume the mortgage liability. Journal entries are provided to record each partner's contribution, with the mortgage payable subtracted from Dora's capital account.
Dexter and Dora agree to form a partnership to buy and sell tuna. Dexter contributes P350,000 cash and Dora contributes P120,000 cash and a delivery vehicle worth P750,000, which has a mortgage of P400,000. The partnership will assume the mortgage liability. Journal entries are provided to record each partner's contribution, with the mortgage payable subtracted from Dora's capital account.
Dexter and Dora agree to form a partnership to buy and sell tuna. Dexter contributes P350,000 cash and Dora contributes P120,000 cash and a delivery vehicle worth P750,000, which has a mortgage of P400,000. The partnership will assume the mortgage liability. Journal entries are provided to record each partner's contribution, with the mortgage payable subtracted from Dora's capital account.
Dexter and Dora agree to form a partnership to buy and sell tuna. Dexter contributes P350,000 cash and Dora contributes P120,000 cash and a delivery vehicle worth P750,000, which has a mortgage of P400,000. The partnership will assume the mortgage liability. Journal entries are provided to record each partner's contribution, with the mortgage payable subtracted from Dora's capital account.
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Dexter and Dora who are both accountants will engage in buying and selling tuna within the
vicinity of General Santos
City. The partners agreed to contribute the following: DEXTER DORA Cash P 350,000 P 120,000 Delivery Car 750,000
Dora has a mortgage balance of P 400,000 for her delivery car and as agreed, the liability will be assumed by the partnership.
REQUIRED: Prepare two simple journal entries recording their respective contributions.
Journal Entries: Partnership will assume the liability:
Cash P350,000 Dexter, Capital P350,000 To record partner’s contribution.
Cash 120,000 Delivery Equip. 750,000 Mortgage payable 400,000 Dora, Capital 470,000 To record partner’s contribution.
Journal Entries: Partnership will not assume the liability:
Cash P350,000 Dexter, capital P350,000 To record Dexter’s contribution.
Cash P120,000 Delivery Equipment 750,000 Dora, capital P870,000 To record Dora’s contribution. Lope Dapun was engaged in buying and selling of high-quality agricultural products in Cotabato. Due to some financial constraint, he accepted the offer and the proposals of Bob Gelacio whereby the latter will invest P 300,000 for a ¼ interest of the total partnership capital. The ledger account balances of Dapun were as follows:
Accounts receivable has 80% probability of collection. Merchandise should have a net realizable value of P 720,000. Equipment should have a fair market value of P65,000.
REQUIRED: 1. Compute the capital account balance of Dapun prior to partnership formation. 2. Prepare the necessary adjusting entries in the book of Dapun by directly affecting his capital account. 3. Prepare a journal entry to close the book of Dapun. 4. Prepare a journal entry to open the book of the partnership. This will record the contribution of Dapun and Gelacio. Solution: Cash P 50,000 Accounts Receivable 100,000 Merchandise 780,000 Equipment 85,000 Accounts Payable (25,000) Dapun, Capital P 990,000
Solution: Unadjusted capital 990,000 Adjustments: a) (20,000) b) (60,000) c) (20,000) Adjusted capital P890,000 Adjusting entries: a) Dapun, capital 20,000 Allowance for DA/EUA 20,000 (100,000*20%)
b) Dapun, capital 60,000
Merchandise 60,000 (780,000 – 720,000)
c) Dapun, capital 20,000
Equipment 20,000 (85,000-65,000)
Closing entry:
Allowance for Doubtful Accounts/EUA P20,000
Accounts Payable 25,000 Dapun, Capital 890,000 Cash P50,000 Accounts Receivable 100,000 Merchandise 720,000 Equipment 65,000 To close Dapun books of accounts. Opening Entries: PARTNERSHIP
Cash P50,000 Accounts Receivable 100,000 Merchandise 720,000 Equipment 65,000 Allowance for Doubtful Accounts P20,000 Accounts Payable 25,000 Dapun, Capital 890,000 To record Dapun’s contribution.
Cash 300,000 Gelacio, Capital 300,000 To record Gelacio’s contribution.
