1

a) sole proprietorship, partnership, corporation, cooperatives

b) service, manufacturing, merchandising/trading

contract between two parties who agree to contribute money,

2 property, indstury to a commond fund

association, There is a mutual agency, Limited life, Unlimited

3 liability, Co-partnership of property, Co-ownership of profit,
Legal entity, Income tax

4 money, property, or industry

5 profit

6 general and limited

Managing, Silent, nominal/partner by estoppel, Secret,

7 dormant

Easy to form/dissolve, Greater amount of capital (than sole proprietorship), freedom/flexibility in decision making (than corporation), Better
8 Lack of business continuity, Limited capital (than corporation), Unlimited liability (deterrent to partners), General partner’s exposes to liabilit
9 paper contract for partnership
it includes: Partnership name, partner’s names, address, and classification (general/limited), Effectivity date, Purpose and principal place of b
Allocation and distribution of profits and losses, Conditions, when partners may withdraw money or other assets, Manner of keeping books o
and arbitration)

10 their share/investment in the company

 (than corporation), Better managed (than sole proprietorship), Unlimited liability makes it appealing to creditors
partner’s exposes to liability, Likelihood of disagreement
ose and principal place of business, Partners’ contributions, Partners’ rights and duties,
Manner of keeping books of accounts, Method of decision making (eg. Causes of dissolution
 page 10
DATE PARTICULARS P/R DEBIT CREDIT
2020 REVALUATION OF ASSETS Allowance for Bad Debts
Mar. 1 Francis, Capital 5,000
Allowance for Bad Debts 5,000
Increasing amount of possible uncollectible accounts

1 Francis, Capital 2,000 Francis, Capital

Office Supplies 2,000 5,000
Revaluing sewing supplies on its fair valuation 2,000
3,000
1 Francis, Capital 3,000 10,000
Accumulated Depreciation, Office Equipment 2,000
Accumulated Depreciation, Furniture and Fixture 1,000
Revalue assets base on its appreciated valuation Office Suppplies
8,000
CLOSING THE BOOKS OF SOLE PROPRIETORSHIP 8,000
1 6,000
Allowance for Bad Debts 10,000
Accumulated Depreciation-Office Equipment 10,000
Accumulated Depreciation-Furniture and Fixture 3,000
Accounts Payable 18,000
Notes Payable due in 2 years 12,000
Francis, Capital 230,000
Cash 87,000
Accounts Receivables 70,000
Notes Receivables 20,000
 Office Supplies 6,000
Office Equipment 80,000
Furniture & Fixture 20,000

PARTNERSHIP BOOKS (Initial investment of partners)

1 Cash 607,000 Cash
Accounts Receivables 70,000 607,000
Notes Receivables 20,000 490,000
Office Supplies 6,000 1,097,000
Office Equipment 70,000
Furniture & Fixture 20,000 Office Suppplies
Allowance for Bad Debts 10,000 6,000
Accumulated Depreciation-Office Equipment 10,000 10,000
Accumulated Depreciation-Furniture and Fixture 3,000 16,000
Accounts Payable 18,000
Notes Payable due in 2 years 230,000 Office Equipment
Francis, Capital 750,000 70,000
1 Initial Investment of Francis 250,000
320,000
Cash 490,000
Office Equipment 250,000
Office Supplies 10,000
Anthony, Capital 750,000
1 Initial Investment of Anthony

Transportation Equipment 750,000

 Roque, Capital 750,000
Initial Investment of Roque
llowance for Bad Debts Accumulated Depreciation - Office Equipment
5,000 8,000
5,000 2,000
10,000 10,000

Francis, Capital Accumulated Depreciation - Furniture & Fixture

240,000 2,000
1,000
3,000
240,000
230,000

Office Suppplies
2,000
2,000
 Cash

Office Suppplies

Office Equipment
 Francis and Friends Law Office
Statement of Financial Position
March 2, 2020
ASSETS
Current Assets
Cash 1,097,000
Trade and Other Receivables 80,000
Office Supplies 16,000
P 1,193,000
Non-Current Assets
Property, Plant and Equipment 1,087,000
Total Assets 2,280,000

LIABILITIES AND PARTNERS' EQUITY

Current Liabilities
Accounts Payable P 18,000
Non-Current Liabilities
Notes Payable due in 2 Years 230,000
Total Liabilities P 248,000

Partners' Equity
Francis, Capital P 750,000
Anthony, Capital 750,000
Roque, Capital 750,000 2,250,000
P 2,250,000
 Computational Notes to the Financial Statement
Note 1: Trade and Other Receivables
Accounts Receivable P 70,000
Allowance for Doubtful Accounts 10,000 P 60,000
Notes Receivable 20,000
Total Trade and Other Receivables P 80,000

Note 2: Property, Plant and Equipment

Transportation Equipment P 750,000
Office Equipment 320,000
Furniture and Fixture 17,000
Total Carrying Value P 1,087,000
Excerise 2-1 Identification

1) partnership
2) industrial partner
3) general partnership
4) nominal partner
5) mutual agency
6) articles of co-partnership
7) general partner
8) co-ownership of property
9) fair market value
10) memorandum entry

Exercise 2-2 True or False

1) 0
2) 0
3) 1
4) 0
5) 0
6) 0
7) 1
8) 1
9) 1
10) 1
 Page 1 CASE C

DATE PARTICULARS P/R DEBIT CREDIT

CASE A Stat
2020
July 1 Cash
Office Equipment Current Assets
Rose, Capital
Rose initial investment

1 Furniture and Fixtures

Guada, Capital Non-Current Assets
Guada Initial Investment

1 Memorandum entry
Marie is an industrial partner
Partners' Equity

CASE B
2020
May 1 Building 1,500,000 Total Partners' Equity
Office Equipment 30,000
Mortgage Payable 300,000
Romy, Capital 1,230,000 Computation
Romy Initial Investment Note 1: Trade Receivables
Accounts Receivables
1 Office Equipment 220,000 Less: Allowance for Doubtfu
Furniture and Fixture 50,000
Cash 550,000
Vic, Capital 820,000 Note 2: Property, Plant and
Vic Initial Investment Office Equipment
Furniture & Fixtures
CASE C
RGM Partnership
Statement of Financial Position
July 4, 2020
ASSETS
Current Assets
Cash P 205,000
Trade and Other Receivables 85,000
Office Supplies 12,000 P 302,000
P 302,000
Non-Current Assets
Property, Plant and Equipment 460,000
P 460,000
P 762,000
PARTNERS' EQUITY
Partners' Equity
Rosario, Capital P 320,000
Guadalupe, Capital 225,000
Maria, Capital 217,000
Total Partners' Equity P 762,000

Computational Notes to the Financial Statement

Note 1: Trade Receivables
Accounts Receivables P 95,000
Less: Allowance for Doubtful Accounts 10,000
P 85,000

Note 2: Property, Plant and Equipment

Office Equipment P 320,000
Furniture & Fixtures 140,000
P 460,000
 DATE PARTICULARS P/R DEBIT CREDIT
2020 REVALUATION
Oct 1 Francis, Capital 2,800
Allowance for Bad Debts 2,800
Revaluation of Allowance for Bad Debts

1 Landscaping Supplies 10,000

Francis, Capital 10,000
Revaluation of Landscaping Supplies

1 Francis, Capital 100,000

Accumulated Depreciation 100,000
Revaluation of Accumulated Depreciation

CLOSING THE BOOKS OF SOLE PROPRIETORSHIP

1 Allowance for Bad Debts 10,800
Accumulated Depreciation 200,000
Accounts Payable 565,000
Francis, Capital 1,634,200
Cash 130,000
Accounts Receivables 720,000
Landscaping Supplies 560,000
Furniture & Fixtures 1,000,000
To close the books before entering the partnership business 2,410,000 2,410,000
 PARTNERSHIP BOOKS
1 Cash 130,000
Accounts Receivables 720,000
Landscaping Supplies 560,000
Furniture & Fixtures 1,000,000
Allowance for Bad Debts 10,800
Accumulated Depreciation 200,000
Accounts Payable 565,000
Francis, Capital 1,634,200
Initial Investment of Francis
1 1
Cash 1,634,200
Pio, Capital 1,634,200
Initial Investment of Pio
 Francis and Pio Lim
Allowance for Bad Debts Statement of Financial
8,000 October 1, 202
2,800 ASSETS
10,800 Current Assets

Francis, Capital
2,800 1,727,000
100,000 10,000
102,800 1,737,000 Non-Current Assets
1,634,200

Landscaping Suppplies
550,000 LIABILITIES AND PARTNE
10,000 Current Liabilities
560,000

Accumulated Depreciation - Furniture & Equipment Partners' Equity

100,000
100,000
200,000

Computational Notes to the Fin

 Cash
130,000
1,634,200
1,764,200
 Francis and Pio Limited
Statement of Financial Position
October 1, 2020
ASSETS
Current Assets
Cash P 1,764,200
Trade Receivables 709,200
Landscaping Supplies 560,000 P 3,033,400

Non-Current Assets
Furniture & Equipment 800,000
P 3,833,400

LIABILITIES AND PARTNERS' EQUITY

Current Liabilities
Accounts Payable P 565,000

Partners' Equity
Francis, Capital P 1,634,200
Pio, Capital 1,634,200 3,268,400
P 3,833,400

Computational Notes to the Financial Statement

Computational Notes to the Financial Statement

Note 1: Trade Receivables
Accounts Receivables P 720,000
Less: Allowance for Bad Debts 10,800
P 709,200
 DATE PARTICULARS P/R DEBIT CREDIT
2020

Apr 1 Anne, Capital 2,500

Allowance for Bad Debts 2,500

Revaluation of Allowance for Bad Debts

1 Catering Supplies Inventory 5,000

Anne, Capital 5,000

Revaluation of Catering Supplies Inventory

1 Anne, Capital 3,300

Accumulated Depreciation 3,300

Revaluation of Accumulated Depreciation

CLOSING THE BOOKS OF SOLE PROPRIETORSHIP

1 Allowance for Doubtful Accounts 7,500

Accumulated Depreciation 10,000

Accounts Payable 8,000

Anne, Capital 209,500

Cash 25,000
 Accounts Receivables 75,000

Catering Supplies Inventory 15,000

Catering Utensils and Equipment 120,000

CLOSING THE BOOKS OF SOLE PROPRIETORSHIP

235,000 235,000

PARTNERSHIP BOOKS

1 Cash 25,000

Accounts Receivables 75,000

Catering Supplies Inventory 15,000

Catering Utensils and Equipment 110,000

Allowance for Doubtful Accounts 7,500

Accounts Payable 8,000

Anne, Capital 209,500

Initial Investment of Anne

1 Cash 104,750

Mary, Capital 104,750

 Anne & Mary Catering Services
Allowance for Bad Debts Statement of Financial Position
April 1, 2020
5,000

2,500
ASSETS

7,500 Current Assets

Anne, Capital

2,500 210,300

3,300 5,000

5,800 215,300
Non-Current Assets

209,500
Total Assets

Catering Supplies Inventory

10,000
LIABILITIES AND PARTNERS' EQUITY

5,000
Current Liabilities

15,000

Accumulated Depreciation
Partners' Equity

6,700

3,300

10,000 Total Liabilities and Partners' Equity

 Computational Notes to the Financial State
Note 1: Trade Receivables
Accounts Receivables
Less: Allowance for Doubtful Accounts

Cash

25,000

104,750

129,750
 Anne & Mary Catering Services
Statement of Financial Position
April 1, 2020

ASSETS
Current Assets
Cash P 129,750
Trade Receivables 67,500
Catering Supplies Inventory 15,000

P 212,250
Non-Current Assets
Catering Utensils and Equipment 110,000
Total Assets P 322,250

LIABILITIES AND PARTNERS' EQUITY

Current Liabilities

Accounts Payable P 8,000

Partners' Equity
Anne, Capital P 209,500
Mary, Capital 104,750 314,250
Total Liabilities and Partners' Equity P 322,250
 Computational Notes to the Financial Statement
Note 1: Trade Receivables
Accounts Receivables P 75,000
Less: Allowance for Doubtful Accounts 7,500
P 67,500
 Anne’s Ledger Agreed
Balances Valuation
Cash P 25,000 25,000
Accounts Receivable 75,000 75,000
Allowance for Doubtful Accounts 5,000 7,500
Catering Supplies Inventory 10,000 15,000
Catering Utensils and Equipment 120,000 110,000
Accumulated Depreciation 6,700 0
Accounts Payable 8,000 8,000

Computing Capital of Anne and Mary

 DATE PARTICULARS P/R DEBIT CREDIT

2020 MICHAEL
Jan. 1 Michael, Capital 2,000
Allowance for Bad Debts 2,000
Revaluation of Accounts Receivables

1 Michael, Capital 400

Office Supplies 400
Revaluation of Office Supplies

1 Michael, Capital 2,000

Accumulated Depreciation-Office Equipment 2,000
Revaluation of Accumulated Depreciation for Office Equipment

1 Accumulated Depreciation-Furniture and Fixures 1,000

Michael, Capital 1,000
Revaluation of Accumulated Depreciation for Furniture and Fixtures

CLOSING THE BOOKS OF SOLE PROPRIETORSHIP

1
Allowance for Doubtful Accounts 2,000
 Accumulated Depreciation-Office Equipment 9,500
Accumulated Depreciation-Furniture and Fixtures 5,000
Accounts Payable 15,000
Michael, Capital 162,100

Cash 50,000
Accounts Receivables 20,000
Office Supplies 3,600
Office Equipment 80,000
Furniture and Fixture 40,000
Closing the books before starting partnership

RAFAEL
1 Rafael, Capital 1,800
Allowance for Doubtful Accounts 1,800
Revaluation of Doubtful Accounts

1 Rafael, Capital 500

Office Supplies Inventory 500
Revaluation of Office Supplies

1 Accumulated Depreciation-Office Equipment 1,500

Rafael, Capital 1,500
 Revaluation of Accumulated Depreciation

CLOSING THE BOOKS OF SOLE PROPRIETORSHIP

1 Allowance for Doubtful Accounts 1,800
Accumulated Depreciation-Office Equipment 7,500
Accumulated Depreciation-Furniture & Fixtures 3,000
Rafael, Capital 118,200
Accounts Payable 10,000
Cash 30,000
Accounts Receivables 18,000
Office Supplies 4,500
Office Equipment 60,000
Furniture and Fixture 28,000
To close the books before joining partnership

PARTNERSHIP BOOKS
1 Cash 50,000
Accounts Receivables 20,000
Office Supplies 3,600
Office Equipment 70,500
Furniture and Fixture 35,000
 Allowance for Doubtful Accounts 2,000
Accounts Payable 15,000
Michael, Capital 162,100
Initial Invesment of Michael

1 Cash 30,000
Accounts Receivables 18,000
Office Supplies 4,500
Office Equipment 52,500
Furniture and Fixtures 25,000
Allowance for Doubtful Accounts 1,800
Accounts Payable 10,000
Rafael, Capital 118,200
Initial Investment of Rafael 130,000 130,000
MICHAEL

Michael, Capital Accumulated Depreciation - Office Equipment

2,000 165,500 7,500
400 1,000 2,000
2,000 9,500
4,400 166,500
162,100 Accumulated Depreciation - Furniture & Fixtures
1,000 6,000
Office Suppplies 1,000 6,000
4,000 400 5,000
4,000 400
3,600

RAFAEL
Rafael, Capital Accumulated Depreciation - Office Equipment
1,800 119,000 1,500 9,000
500 1,500 1,500 9,000
2,300 120,500 7,500
118,200
 Office Suppplies
5,000 500
5,000 500
4,500
 Michael Rafael
Cash 50,000 30,000
Accounts Receivable 20,000 18,000
Office Supplies 4,000 5,000
Office Equipment 80,000 60,000
Accumulated Depreciation-Office Equipment 7,500 9,000
Furniture and Fixture 40,000 28,000
Accumulated Depreciation-Furniture & Fixture 6,000 3,000
Accounts Payable 15,000 10,000

Michael Rafael
 DATE PARTICULARS P/R DEBIT CREDIT ROMY ENGINEERIN

2020 ROMY ENGINEERING SERVICES

Jan. 1 Romy, Capital 1,500
Allowance for Bad Debts 1,500
Revaluation of Allowance for Bad Debts

1 Accumulated Depreciation-Office Equipment 3,000

Romy, Capital 2,600
Accumulated Depreciation- Furniture and Fixtures 400
Revaluation of Accumulated Depreciation

1 Office Supplies 700

Romy, Capital 700
Revaluation of Office Supplies

CLOSING THE BOOKS OF SOLE PROPRIETORSHIP

ROMY ENGINEERING SERVICES
1 Allowance for Bad Debts 6,500
Accumulated Depreciation-Office Equipment 22,000
Accumulated Depreciation-Furniture & Fixtures 12,400 ARGEM PROPERTY
Accounts Payable 24,000
Romy, Capital 224,400
Cash 46,000
Accounts Receivables 65,000
Office Supplies 6,300
Office Equipment 110,000
 Furniture and Fixtures 62,000
Closing the Books of Romy Engineering Services

ARGEM PROPERTY MANAGEMENT SERVICES

1 Argem, Capital 1,500
Allowance for Bad Debts 1,500
Revaluation of Allowance for Bad Debts

1 Accumulated Depreciation-Office Equipment 2,400

Argem, Capital 2,000
Accumulated Depreciation-Furniture & Fixtures 400
Revaluation of Accumulated Depreciation

1 Argem, Capital 1,000

Interest Payable 1,000
Revaluation of Interest Payable

1 Argem, Capital 1,400

Office Supplies 1,400
Revaluation of Office Supplies

CLOSING THE BOOKS OF SOLE PROPRIETORSHIP

1 Allowance for Bad Debts 4,500
Accumulated Depreciation-Office Equipment 19,600
Accumulated Depreciation-Furniture & Fixtures 6,400
Notes Payable 10,000
 Accounts Payable 8,000
Interest Payable 1,000
Argem, Capital 176,100
Cash 38,000
Accounts Receivables 45,000
Office Supplies 12,600
Office Equipment 98,000
Furniture and Fixtures 32,000
Closing the Books of Argem Property Management Services

PARTNERSHIP BOOKS
1 Cash 46,000
Accounts Receivables 65,000
Office Supplies 6,300
Office Equipment 88,000
Furniture and Fixutres 49,600
Allowance for Bad Debts 6,500
Accounts Payable 24,000
Romy Capital 224,400
Initial Investment of Romy

1 Cash 198,500
Accounts Receivables 45,000
Office Supplies 12,600
Office Equipment 78,400
Furniture and Fixtures 25,600
Allowance for Bad Debts 4,500
Notes Payable 10,000
Accounts Payable 8,000
Interest Payable 1,000
Argem, Capital 336,600
Initial Investment of Argem
ROMY ENGINEERING SERVICES

Allowance for Bad Debts Accumulated Depreciation - Office Equipment

5,000 3,000 25,000
1,500 3,000 25,000
6,500 22,000

Romy, Capital Accumulated Depreciation - Furniture & Fixtures

1,500 224,000 12,000
700 2,600 400
2,200 226,600 12,400
224,400

Office Suppplies
7,000 700
7,000 700
6,300

ARGEM PROPERTY MANAGEMENT SERVICES

Allowance for Bad Debts Accumulated Depreciation - Office Equipment
3,000 2,400 22,000
1,500 2,400 22,000
4,500 19,600

Argem, Capital Accumulated Depreciation - Furniture & Fixtures

 1,500 178,000 6,000
1,000 2,000 400
1,400 6,400
3,900 180,000
176,100

Office Suppplies
14,000 1,400
14,000 1,400
12,600
 Romy Argem
Unadjusted Capital 224,000 178,000
Revaluations: ADD/(DEDUCT)
 DATE PARTICULARS P/R DEBIT CREDIT

2020

Jan. 1 Martin, Capital 8,000

Allowance for Bad Debts 8,000

Revaluation of Allowance for Bad Debts

1 Martin, Capital 142,000

Accumulated Depreciation-Delivery Equipment 90,000

Accumulated Depreciation-Office Equipment 36,000

Accumulated Depreciation-Furniture and Fixtures 16,000

Revaluation of Accumulated Depreciation

CLOSING THE BOOKS OF SOLE PROPRIETORSHIP

1 Allowance for Bad Debts 8,000

Accounts Payable 30,000

 Martin, Capital 870,000

Cash 400,000

Accounts Receivables 80,000

Delivery Equipment 260,000

Office Equipment 104,000

Furniture and Fixtures 64,000

to close the books of the sole proprietorship

PARTNERSHIP BOOKS

1 Cash 400,000

Accounts Receivables 80,000

Delivery Equipment 260,000

Office Equipment 104,000

Furniture and Fixtures 64,000

Allowance for Bad Debts 8,000

Accounts Payable 30,000

Martin, Capital 870,000

Initial Investment of Martin

1 Cash 530,000

Office Equipment 50,000

Jude, Capital 580,000

Initial Investment of Jude

 315,000

315000

ACCUMULA
45000
TED DE

126000

18000 ACCUMULATED OE

8000 ACCUMULATED FF

870,000 capital
870,000 capital

1450000 100% of investment

580000 40% of investment