FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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Transcribed Image Text:Conditions agreed upon before the formation of the partnership:
a. The accounts receivable of Tolentino is estimated to be 70% realizable.
b. The accumulated depreciation of the equipment will be increased by P10,000.
c. The accounts payable will be assumed by the partnership.
d. The capital of the partnership is based on the adjusted capital balance of Tolentino. Tan
is to contribute cash in order to make the partner's capital balances proportionate to the
profit and loss ratio.
Required:
1. Prepare the necessary journal entries in the books of Tolentino.
2. Prepare the opening journal entries in the books of the partnership
3. Prepare the Initial Financial Statement of the partnership.
Transcribed Image Text:On Apr. 8, 2020, Tolentino who has her own retail business and Tan, decided to form a
partnership wherein they will divide profits in the ratio of 40:60, respectively. The statement of
financial position of Tolentino is as follows:
Tolentino Marketing
Statement of Financial Position
April 8, 2020
Assets
Cash
P 4,000
Accounts Receivable
P160,000
Less: Allowance for Uncollectible Accounts
16,000
144,000
Inventory
200,000
Equipment
P 50,000
Less: Accumulated Depreciation
10,000
40,000
Total Assets
P388,000
Liabilities and Capital
Accounts Payable
P 36,000
Tolentino, Capital
352,000
Total Liabilities and Capital
P388,000
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- Dengerarrow_forwardhow do i calculate remainder to allocate?arrow_forwardAssume the G&L partnership forms with cash contributions of $100,000 each from G and L. The partnership then borrows $800,000 on a nonrecourse loan and purchases a building on leased land for $ 1,000,000. Assume that the building is rented and that annual cash revenues equal cash expenses but depreciation of $50,000 per year results in a $50,000 annual loss. All items of income, loss, and deduction are shared equally. When is the first year that the partnership will record Partnership Minimum Gain ( PMG)? Please don't use any AI. It's strictly prohibited. Help me out asap Thanksarrow_forward
- Assume the G&L partnership forms with cash contributions of $100,000 each from G and L. The partnership then borrows $800,000 on a nonrecourse loan and purchases a building on leased land for $1,000,000. Assume that the building is rented and that annual cash revenues equal cash expenses but depreciation of $50,000 per year results in a $50,000 annual loss. All items of income, loss, and deduction are shared equally. When is the first year that the partnership will record Partnershiparrow_forward2. Hammer and Nail formed a partnership. Hammer contributed equipment with original cost of P370,000 and fair value of P300,000 while Nail contributed cash of P180,000. Hammer and Nail agreed to have a 60:40 interest in the partnership and that their initial capital credits should reflect this fact. A partner's capital account should be increased accordingly by way of additional cash investment. Which of the partners should make an additional investment and by how much? a. Hammer, P20,000 b. Nail, P20,000 c. Hammer, P70,000 d. Nail, P70,000arrow_forwarda. Prepare a profit distribution account for the year ended 31 October 2021. b. Prepare the partners' current accounts (in columnar form) for the year to 31 October 2021. c. (Note: All the figures must be rounded up to the nearest RM) note i need the answer in full format thank youarrow_forward
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