Exercise 3: Partnership Formation On July 1,2019, Gerardo and Ismael decide to form a partnership with Gerardo transferring his net assets excluding cash and Ismael contributing cash in an amount equal to one-half of Gerardo's investment. The balance sheet of Gerardo is as follows: Gerardo's Grocery Store Balance Sheet July 1, 2019 LIABILITIES & OWNER'S EQUITY Accounts Payable Gerardo, Capital ASSETS Cash P 20,000 P45,000 Accounts Receivable P30,000 57,000 Allow. For bad debts 5,000 25,000 Inventory 50,000 Furniture P10,000 Allow. For depreciation 3,000 7,000 ТОTAL LIABILITIES & TOTAL ASSETS P102,000 OWNERS' EQUITY P102,000 ======== ======= The agreement calls for adjustments to the net assets of Gerardo as follows: a. The receivables are to be valued at P18,000 b. The furniture was acquired five years ago and is estimated to have a remaining useful life of three years. c. The goodwill of Gerardo's Grocery Store is valued at P15,000 Instructions: a. Give the required entries on the new set of books of the partnership b. Prepare a balance sheet for the firm Gerardo and Ismael as of July 1, 2019.
Exercise 3: Partnership Formation On July 1,2019, Gerardo and Ismael decide to form a partnership with Gerardo transferring his net assets excluding cash and Ismael contributing cash in an amount equal to one-half of Gerardo's investment. The balance sheet of Gerardo is as follows: Gerardo's Grocery Store Balance Sheet July 1, 2019 LIABILITIES & OWNER'S EQUITY Accounts Payable Gerardo, Capital ASSETS Cash P 20,000 P45,000 Accounts Receivable P30,000 57,000 Allow. For bad debts 5,000 25,000 Inventory 50,000 Furniture P10,000 Allow. For depreciation 3,000 7,000 ТОTAL LIABILITIES & TOTAL ASSETS P102,000 OWNERS' EQUITY P102,000 ======== ======= The agreement calls for adjustments to the net assets of Gerardo as follows: a. The receivables are to be valued at P18,000 b. The furniture was acquired five years ago and is estimated to have a remaining useful life of three years. c. The goodwill of Gerardo's Grocery Store is valued at P15,000 Instructions: a. Give the required entries on the new set of books of the partnership b. Prepare a balance sheet for the firm Gerardo and Ismael as of July 1, 2019.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Exercise 3: Partnership Formation
On July 1,2019, Gerardo and Ismael decide to form a partnership with Gerardo transferring his net assets excluding cash and Ismael contributing cash in an amount equal to one-half of Gerardo’s investment. The
(see attached image)
The agreement calls for adjustments to the net assets of Gerardo as follows:
- The receivables are to be valued at P18,000
- The furniture was acquired five years ago and is estimated to have a remaining useful life of three years.
- The
goodwill of Gerardo’s Grocery Store is valued at P15,000
Instructions:
- Give the required entries on the new set of books of the partnership
- Prepare a balance sheet for the firm Gerardo and Ismael as of July 1, 2019.
Transcribed Image Text:Exercise 3: Partnership Formation
On July 1,2019, Gerardo and Ismael decide
net assets excluding cash and Ismael contributing cash in an amount equal to one-half of
Gerardo's investment. The balance sheet of Gerardo is as follows:
form a partnership with Gerardo transferring his
Gerardo's Grocery Store
Balance Sheet
July 1, 2019
ASSETS
LIABILITIES & OWNER'S EQUITY
P 20,000
Accounts Payable
Gerardo, Capital
Cash
P45,000
Accounts Receivable
P30,000
57,000
Allow. For bad debts
5,000
25,000
Inventory
50,000
Furniture
P10,000
Allow. For depreciation
3,000
7,000
TOTAL
LIABILITIES
&
TOTAL ASSETS
P102,000 OWNERS' EQUITY
P102,000
========
3=====3D
The agreement calls for adjustments to the net assets of Gerardo as follows:
a. The receivables are to be valued at P18,000
b. The furniture was acquired five years ago and is estimated to have a remaining useful life
of three years.
c. The goodwill of Gerardo's Grocery Store is valued at P15,000
Instructions:
a. Give the required entries on the new set of books of the partnership
b. Prepare a balance sheet for the firm Gerardo and Ismael as of July 1, 2019.
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