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FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Show the solution in good accounting form On March 1, 2018, X and Y formed a partnership. The partners contributed the following: X Y Cash P500,000 P400,000 Accounts Receivable 300,000 200,000 Allowance for doubtful accounts50,000 20,000 Inventory 150,000 100,000 Equipment 500,000 200,000 Accumulated depreciation 100,000 25,000 Accounts Payable 50,000 400,000 Note Payable 200,00 The partners agree on the following: a. P10,000 of the accounts receivable of X is to be written-off. b. An allowance for doubtful accounts of 15% is to be established on the remaining receivatbies of X and Y. C. The inventory of Y is to be valued at P140,000. D. The equipment of X is under depreciated by P20,000 and the equipment ofY has a fair value of P190,000. E. The note of X is dated December 1, 2017 and is subject to a 12% interest. Interest had not yet been accrued. F. The partners agree on a 2:1 profit and loss ratio. G. The partners agree to bring their capital balance proportionate to their profit and loss ratio. Question: 1.What is the total assets of the partnership immediately after the formation?

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