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    Illustrative Examples

    Uploaded by

    Banjo A. Reyes

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd

    Illustrative Examples

    Uploaded by

    Banjo A. Reyes
    10 views2 pages

    Copyright

    © © All Rights Reserved

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    DOCX, PDF, TXT or read online from Scribd

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    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    10 views2 pages

    Illustrative Examples

    Uploaded by

    Banjo A. Reyes

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    of 2

    A and B form a partnership.

    The following are their contribution

    A B

    Cash 100,000

    Accounts Receivable 50,000

    Inventory 80,000

    Land 50,000

    Building 120,000

    Total 230,000 170,000

    Note Payable 60,000

    A, Capital 170,000

    B, Capital 170,000

    Total 230,000 170,000

    -Included in A/R is an account amounting to P20,000 which is deemed uncollectible.

    -The inventory has an estimated selling price of P100,000 and estimated costs to sell of P10,000.
    (90,000)

    -The partnership assumed a P10,000 unpaid mortgage on the land.

    -The building is under-depreciated by Php 25,000.

    -There is an unpaid mortgage of P15,000 on the building which B agreed to settle using his personal
    funds.

    -The note payable is stated at face amount. A proper valuation requires the recognition of a Php15,000
    discount on note payable.

    -A and B shall share in profits and losses on a 60:40 ratio respectively

    Requirement: Compute for the adjusted balances of the partner’s capital accounts.

    Assume that a partner’s capital shall increased accordingly by contributing cash to bring the partners’
    capital balances proportionate to their profits and loss ratio. Which partners should provide additional
    cash and how much is the additional cash contributions?
    Day and Night contributed the following in forming a partnership business:

    Day Night

    Cash 280,000

    A/R 100,000

    Inventory 160,000

    Building (carrying amount) 760,000

    Total 540,000 760,000

    Only 60% of the A/R is recoverable

    The net realizable value of inventory is 120,000.

    The building has fair value of Php 900,000

    Provide journal entry.

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