College Accounting, Chapters 1-27
23rd Edition
ISBN: 9781337794756
Author: HEINTZ, James A.
Publisher: Cengage Learning,
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Chapter 19, Problem 6SPA
To determine
Prepare the opening entry for the formation of the
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PARTNERSHIP OPENING ENTRIES On July 1, 20--, Susan Woodworth and Barbara Holly combined their two businesses to form a partnership under the firm name of Woodworth and Holly. The balance sheets of the two sole proprietorships are shown below and on the next page.The balance sheets reflect fair market values except for the following:(a) The fair market value of Woodworth’s store equipment is $7,500.(b) The fair market values of Holly’s office equipment and store equipment are $6,100 and $6,800, respectively.RequiredPrepare the opening entry for the formation of the Woodworth and Holly partnership as of July 1, 20--, using fair market values. The difference between assets invested and liabilities assumed should be credited to each partner’s capital account. Neither partner has knowledge of any uncollectible accounts receivable.
Assignment Topic
Question No:1
Mr. Suhail and Mr. Said decided to start a partnership business.
They drafted a partnership deed with the help of a consultant and
started the business on 01.11.2020
Some of the key extracts of the partnership deed is given as follows:
Resolved that.
a. Each partner is to bring in OMR 15,000 as capital
b. Each partner is to get 5% interest on capital
c. Mr. Suhail is entitled to get a salary of OMR 400 per month
d. Firm is entitled to charge 6% interest per annum on partner's
drawings.
Summary of transactions:
November: 2020
a. Capital contribution: Mr. Suhail -OMR 15000; Mr. Said: OMR
15000
b. Purchase of goods- OMR 8,000
c. Sales of goods- OMR 18,000
d. Wages- OMR 200
e. Salary to employees- OMR 1,200
f. Other administrative expenses- OMR 800
g. Rent of building- OMR 1,000
h. Electricity charges- OMR 15
i. Water charges- OMR 5
j. Travelling expenses- OMR 50
k. Furniture purchase- OMR 1,500
1. Electrical fittings- OMR 200
m. Drawings of partners-: Mr.…
Chapter 1-Accountring for Partnership Formation & Operation
On March 1, of the current year, PP and QQ decide to combine their businesses
and form a partnership. Their balance sheets on March 1, before adjustments.
MULTIPLE CHOICE (PROBLEMS)
QQ
PP
9,000.00
18,500.00
30,000.00
30,000.00
11,500.00
6,375.00
105,375.00
45,750.00
59,625.00
105,375.00
3,750.00
13,500.00
19,500.00
9,000.00
2,750.00
3,000.00
51,500.00
18,000.00
33,500.00
51,500.00
showed the following:
P
Cash
Accounts Receivable
Inventories
Furniture and Fixtures (net)
Office Equipment (net)
Prepaid Expenses
Total
P.
Accounts Payable
Capital
Total
P
They agreed to have the following items recorded in their books:
a. Provide 2% allowance for doubtful accounts.
b. PP's furniture and fixtures should be P31,000, while QQ's office
equipment is under-depreciated by P250.
c. Rent expense incurred previously by PP was not yet recorded amounting
to P1,000, while salary expense incurred by QQ was not also recorded
amounting to P800.
d.…
Chapter 19 Solutions
College Accounting, Chapters 1-27
Ch. 19 - Prob. 1TFCh. 19 - Prob. 2TFCh. 19 - Prob. 3TFCh. 19 - Prob. 4TFCh. 19 - Prob. 5TFCh. 19 - Prob. 1MCCh. 19 - Prob. 2MCCh. 19 - Prob. 3MCCh. 19 - Prob. 4MCCh. 19 - Prob. 5MC
Ch. 19 - Prob. 1CECh. 19 - Prob. 2CECh. 19 - Prob. 3CECh. 19 - Prob. 4CECh. 19 - Prob. 5CECh. 19 - Prob. 1RQCh. 19 - Prob. 2RQCh. 19 - Prob. 3RQCh. 19 - Prob. 4RQCh. 19 - Prob. 5RQCh. 19 - Prob. 6RQCh. 19 - Prob. 7RQCh. 19 - Prob. 8RQCh. 19 - Prob. 9RQCh. 19 - Prob. 1SEACh. 19 - Prob. 2SEACh. 19 - Prob. 3SEACh. 19 - Prob. 4SEACh. 19 - ENTRIES: PARTNERSHIP LIQUIDATION On liquidation of...Ch. 19 - Prob. 6SPACh. 19 - Prob. 7SPACh. 19 - Prob. 8SPACh. 19 - Prob. 9SPACh. 19 - STATEMENT OF PARTNER SHIP LIQUIDATION WITH LOSS...Ch. 19 - Prob. 1SEBCh. 19 - Prob. 2SEBCh. 19 - Prob. 3SEBCh. 19 - Prob. 4SEBCh. 19 - Prob. 5SEBCh. 19 - Prob. 6SPBCh. 19 - Prob. 7SPBCh. 19 - ENTRIES FOR DISSOLUTION OF PARTNERSHIP Cummings...Ch. 19 - Prob. 9SPBCh. 19 - STATEMENT OF PARTNER SHIP LIQUIDATION WITH LOSS...Ch. 19 - Prob. 1MYWCh. 19 - Prob. 1ECCh. 19 - Prob. 1MPCh. 19 - Prob. 1CPCh. 19 - Prob. 1COP
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- Problem 1: On January 1, 20x1, Rody and Noy formed a partnership. Rody and Noy contributed the following assets at formation:   Rody Noy Cash 25,000 37,500 Inventory  18,750 Building  50,000 Equipment 18,750   The building is subject to a P12,500 mortgage, which was assumed by the partnership. They share profit and loss in the ratio of 60:40. Assuming Rody will invest (withdraw) cash so that his capital balance will equal to his profit and loss ratio, what is the total asset of the partnership after formation? (The correct answer is 246,875 but I need a solution/explanation)arrow_forwardQuestion No:1           Mr. Suhail and Mr. Said decided to start a partnership business. They drafted a partnership deed with the help of a consultant and started the business on 01.11.2020  Some of the key extracts of the partnership deed is given as follows: Resolved that. Each partner is to bring in OMR 15,000 as capital Each partner is to get 5% interest on capital Suhail is entitled to get a salary of OMR 400 per month Firm is entitled to charge 6% interest per annum on partner’s drawings. Summary of transactions: November: 2020 Capital contribution: Mr. Suhail –OMR 15000; Mr. Said: OMR 15000 Purchase of goods- OMR 8,000 Sales of goods- OMR 18,000 Wages- OMR 200 Salary to employees- OMR 1,200 Other administrative expenses- OMR 800 Rent of building- OMR 1,000 Electricity charges- OMR 15 Water charges- OMR 5 Travelling expenses- OMR 50 Furniture purchase- OMR 1,500 Electrical fittings- OMR 200 Drawings of partners-: Mr. Suhail –OMR 200; Mr. Said; OMR 150 Salary to Mr. Suhail-…arrow_forwardAssignment Topic Question No:1 Mr. Suhail and Mr. Said decided to start a partnership business. They drafted a partnership deed with the help of a consultant and started the business on 01.11.2020 Some of the key extracts of the partnership deed is given as follows: Resolved that. a. Each partner is to bring in OMR 15,000 as capital b. Each partner is to get 5% interest on capital c. Mr. Suhail is entitled to get a salary of OMR 400 per month d. Firm is entitled to charge 6% interest per annum on partner's drawings. Summary of transactions: November: 2020 a. Capital contribution: Mr. Suhail -OMR 15000; Mr. Said: OMR 15000 b. Purchase of goods- OMR 8,000 c. Sales of goods- OMR 18,000 d. Wages- OMR 200 e. Salary to employees- OMR 1,200 f. Other administrative expenses- OMR 800 g. Rent of building- OMR 1,000 h. Electricity charges- OMR 15 i. Water charges- OMR 5 j. Travelling expenses- OMR 50 k. Furniture purchase- OMR 1,500 1. Electrical fittings- OMR 200 m. Drawings of partners-: Mr.…arrow_forward
- Instructions Instructions Chart of Accounts General Journal X Jesse and Tim form a partnership by combining the assets of their separate businesses. Jesse contributes accounts receivable with a face amount of $47,000 and equipment with a cost of $178,000 and accumulated depreciation of $102,000. The partners agree that the equipment is to be valued at $68,400, that $4,000 of the accounts receivable are completely worthless and are not to be accepted by the partnership, and that $2,200 is a reasonable allowance for the uncollectibility of the remaining accounts receivable. Tim contributes cash of $20,500 and merchandise inventory of $45,000. The partners agree that the merchandise inventory is to be valued at $48,500. Required: Journalize the entries to record in the partnership accounts (a) Jesse's investment and (b) Tim's investment. Refer to the Chart of Accounts for exact wording of account titles.arrow_forwardHomework Activity 1 A, B and C are in Partnership sharing profits and losses in the ratio of 2:1:1. During the year ending 31st Dec 2019, the business made a profit of RO 64,000 before providing Interest on capital : A 2,000,         B 1500,         C 1000 Interest on drawings: A 200,            B 150,           C 100 Salary to Partners A 500             B 700            C 600 Commission to Partners A 200             B 300            C 400 Prepare a profit and loss appropriation account to show the distribution of profit among the partners.arrow_forwardFinancial Statements for Partnership The ledger of Camila Ramirez and Ping Xue, attorneys-at-law, contains the following accounts and balances after adjustments have been recorded on December 31, 20Y2: Ramirez and Xue Trial Balance December 31, 20Y2  Debit Balances  Credit Balances Cash 40,700   Accounts Receivable 38,800   Supplies 1,500   Land 97,000   Building 105,600   Accumulated Depreciation—Building   60,600 Office Equipment 44,600   Accumulated Depreciation—Office Equipment   18,800 Accounts Payable   28,900 Salaries Payable   3,100 Camila Ramirez, Capital   100,000 Camila Ramirez, Drawing 43,700   Ping Xue, Capital   58,200 Ping Xue, Drawing 63,100   Professional Fees   349,200 Salary Expense 141,600   Depreciation Expense—Building 14,100   Heating and Lighting Expense 7,000   Depreciation Expense—Office Equipment 4,400   Property Tax Expense 8,700   Supplies Expense 5,000…arrow_forward
- Financial Statements for Partnership The ledger of Camila Ramirez and Ping Xue, attorneys-at-law, contains the following accounts and balances after adjustments have been recorded on December 31, 20Y2: Ramirez and Xue Trial Balance December 31, 20Y2  Debit Balances  Credit Balances Cash 50,400   Accounts Receivable 48,000   Supplies 1,800   Land 120,000   Building 128,600   Accumulated Depreciation—Building   75,000 Office Equipment 55,200   Accumulated Depreciation—Office Equipment   23,300 Accounts Payable   35,800 Salaries Payable   3,800 Camila Ramirez, Capital   120,000 Camila Ramirez, Drawing 54,000   Ping Xue, Capital   72,000 Ping Xue, Drawing 78,000   Professional Fees   433,400 Salary Expense 175,200   Depreciation Expense—Building 17,400   Heating and Lighting Expense 8,600   Depreciation Expense—Office Equipment 5,400   Property Tax Expense 10,800   Supplies Expense 6,200…arrow_forwardChapter 3 – Partnership Operation (Division of Profit or Loss) Bruce and Rachel agree to form a partnership on July 1, 2020. Bruce, who has been trading as a sole proprietor, will invest certain business assets at agreed valuations, transfer his business liabilities and contribute sufficient cash to bring his total contribution to a 60% interest over the new business. Details of Bruce’s assets and liabilities are given below. Book value Agreed value Accounts receivable P 32,000 P 30,000 Inventory 240,000 138,000 Equipment 322,000 240,000 Accounts payable 200,000 200,000 Notes payable 14,000 14,000 Rachel agrees to bring in inventory with a value of P146,500 and P93,500 in cash for a 40% interest in the partnership. The partners have agreed on the following: 1. Capital accounts will remain fixed 2. 12% interest profit computed on capital 3. Salaries of P30,000 each for 2020 but will be twice this amount next year and thereafter; 4. 10% interest charge on partners’ drawings made beyond…arrow_forwardChapter 3 – Partnership Operation (Division of Profit or Loss) Bruce and Rachel agree to form a partnership on July 1, 2020. Bruce, who has been trading as a sole proprietor, will invest certain business assets at agreed valuations, transfer his business liabilities and contribute sufficient cash to bring his total contribution to a 60% interest over the new business. Details of Bruce’s assets and liabilities are given below. Book value Agreed value Accounts receivable P 32,000 P 30,000 Inventory 240,000 138,000 Equipment 322,000 240,000 Accounts payable 200,000 200,000 Notes payable 14,000 14,000 Rachel agrees to bring in inventory with a value of P146,500 and P93,500 in cash for a 40% interest in the partnership. The partners have agreed on the following: 1. Capital accounts will remain fixed 2. 12% interest profit computed on capital 3. Salaries of P30,000 each for 2020 but will be twice this amount next year and thereafter; 4. 10% interest charge on partners’ drawings made beyond…arrow_forward
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