On Nov. 8, 2021, Cadag who has her own retail business and Napay, decided to form a partnership wherein they will all divide profits in the ratio of 40:60, respectively. The statement of financial position of Cadag is as follows: Cadag Marketing Statement of Financial Position November 8, 2021 ASSETS Cash P4, 000.00 Accounts Receivable Less: ADA P160, 000.00 16, 000.00 144, 000.00 200, 000.00 Inventory Equipment Less: Accumulated Depreciation Total Assets 50, 000.00 10, 000.00 40, 000.00 P388, 000.00 Liabilities and Capital Accounts Payable Cadag, Capital Total Liabilities and Capital 36, 000.00 352, 000.00 P388, 000.00 Conditions agreed upon before the formation of the partnership: a. The accounts receivable of Cadag is estimated to be 70% realizable. b. The Accumulated Depreciation of the equipment will be increase by P10, 000.00 c. The accounts payable will be assumed by the partnership. d. The capital of the partnership is based on the adjusted capital balance of Cadag. Napay is to contribute cash in order to make the partner's capital balances proportionate to the P/L ratio. Required: 1. Prepare the journal entries for the formation of the partnership. 2. Prepare schedule or computation that will support your answer.
On Nov. 8, 2021, Cadag who has her own retail business and Napay, decided to form a partnership wherein they will all divide profits in the ratio of 40:60, respectively. The statement of financial position of Cadag is as follows: Cadag Marketing Statement of Financial Position November 8, 2021 ASSETS Cash P4, 000.00 Accounts Receivable Less: ADA P160, 000.00 16, 000.00 144, 000.00 200, 000.00 Inventory Equipment Less: Accumulated Depreciation Total Assets 50, 000.00 10, 000.00 40, 000.00 P388, 000.00 Liabilities and Capital Accounts Payable Cadag, Capital Total Liabilities and Capital 36, 000.00 352, 000.00 P388, 000.00 Conditions agreed upon before the formation of the partnership: a. The accounts receivable of Cadag is estimated to be 70% realizable. b. The Accumulated Depreciation of the equipment will be increase by P10, 000.00 c. The accounts payable will be assumed by the partnership. d. The capital of the partnership is based on the adjusted capital balance of Cadag. Napay is to contribute cash in order to make the partner's capital balances proportionate to the P/L ratio. Required: 1. Prepare the journal entries for the formation of the partnership. 2. Prepare schedule or computation that will support your answer.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 2 steps with 2 images
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education