A and B form a partnership.
The following are their contribution
A B
Cash 100,000
Accounts Receivable 50,000
Inventory 80,000
Land 50,000
Building 120,000
Total 230,000 170,000
Note Payable 60,000
A, Capital 170,000
B, Capital 170,000
Total 230,000 170,000
-Included in A/R is an account amounting to P20,000 which is deemed uncollectible.
-The inventory has an estimated selling price of P100,000 and estimated costs to sell of P10,000.
(90,000)
-The partnership assumed a P10,000 unpaid mortgage on the land.
-The building is under-depreciated by Php 25,000.
-There is an unpaid mortgage of P15,000 on the building which B agreed to settle using his personal
funds.
-The note payable is stated at face amount. A proper valuation requires the recognition of a Php15,000
discount on note payable.
-A and B shall share in profits and losses on a 60:40 ratio respectively
Requirement: Compute for the adjusted balances of the partner’s capital accounts.
Assume that a partner’s capital shall increased accordingly by contributing cash to bring the partners’
capital balances proportionate to their profits and loss ratio. Which partners should provide additional
cash and how much is the additional cash contributions?
Day and Night contributed the following in forming a partnership business:
Day Night
Cash 280,000
A/R 100,000
Inventory 160,000
Building (carrying amount) 760,000
Total 540,000 760,000
Only 60% of the A/R is recoverable
The net realizable value of inventory is 120,000.
The building has fair value of Php 900,000
Provide journal entry.
