Two sole proprietors L and M agreed to form a partnership on January 31, 20x4. The trial balance for each proprietor is shown below as of January 1, 20x4 L Cash Account receivable, net Merchandise inventory Building, net Furniture and fixtures, net Accounts payable Mortgage payable L, Capital M, Capital BOOK VALUE 40,000.00 60,000.00 L FAIR VALUE 40,000.00 52,000.00 M BOOK VALUE 30,000.00 70,000.00 M FAIR VALUE 30,000.00 56,000.00 100,000.00 94,000.00 100,000.00 114,000.00 280,000.00 320,000.00 250,000.00 280,000.00 60,000.00 64,000.00 40,000.00 44,000.00 110,000.00 110,000.00 80,000.00 80.000.00 150,000.00 150,000.00 200,000.00 200,000.00 230,000.00 260,000.00 The L and M partnership will take over the assets an assume the liabilities of the proprietors as of January 1, 20x4 REQUIRED: A. Determine the following items after formation of the partnership. (1) Total assets, (2) Total liabilities, and (3) Total capital

Two sole proprietors L and M agreed to form a partnership on January 31, 20x4. The trial balance for each proprietor is shown below as of January 1, 20x4 L Cash Account receivable, net Merchandise inventory Building, net Furniture and fixtures, net Accounts payable Mortgage payable L, Capital M, Capital BOOK VALUE 40,000.00 60,000.00 L FAIR VALUE 40,000.00 52,000.00 M BOOK VALUE 30,000.00 70,000.00 M FAIR VALUE 30,000.00 56,000.00 100,000.00 94,000.00 100,000.00 114,000.00 280,000.00 320,000.00 250,000.00 280,000.00 60,000.00 64,000.00 40,000.00 44,000.00 110,000.00 110,000.00 80,000.00 80.000.00 150,000.00 150,000.00 200,000.00 200,000.00 230,000.00 260,000.00 The L and M partnership will take over the assets an assume the liabilities of the proprietors as of January 1, 20x4 REQUIRED: A. Determine the following items after formation of the partnership. (1) Total assets, (2) Total liabilities, and (3) Total capital

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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The following is the trail Balance of X and Y Co. as on March 31, 2021. The partners sharing profits and losses in the ratio 2:1. Prepare the Income Statement, Profit & Loss Appropriation A/c, Partners' Capital A/c and the Balance Sheet. Particulars Dr. Particulars Cr. 637500 X Capital A/c 191250 Y Capital A/c 85000 Sundry creditors 170000 Sales (net) 85000 Discount Land and Buildings 212500 Plant and Machinery 127500 Wages 106250 Opening Stock of Finished Goods 1381250 Opening Stock of Raw material 10625 Opening Stock of Work in Progress 76500 Provision for bad debts 6375 Sundry debtors 212500 Commission 42500 Carriage inwards 6375 Y's Loan A/c 127500 Carriage outwards 3825 Factory Expenses 31875 Royalties 6375 Purchase of Raw material (net) 318750 Factory rent & taxes 27625 Discount 12325 Office rent 17000 Insurance 8500 Bad debts 6375 Office Expenses 31875 Salaries of works manager 51000 Cash at bank 34850 2014500 2014500 The following additional information is to be taken into…
The following is the trail Balance of X and Y Co. as on March 31, 2021. The partners sharing profits and losses in the ratio 2:1. Prepare the Income Statement, Profit & Loss Appropriation A/c, Partners' Capital A/c and the Balance Sheet. Particulars Dr. Particulars Cr. Land and Buildings 187500 x Capital A/c 56250 Y Capital A/c 25000 Sundry creditors 50000 Sales (net) 25000 Discount 22500 Provision for bad debts 62500 37500 Plant and Machinery Wages 31250 Opening Stock of Finished Goods 406250 3125 Opening Stock of Raw material Opening Stock of Work in Progress 1875 Sundry debtors 62500 Commission 12500 Carriage inwards 1875 Y's Loan A/c 37500 Carriage outwards 1125 Factory Expenses 9375 Royalties 1875 Purchase of Raw material (net) 93750 Factory rent & taxes 8125 Discount 3625 Office rent 5000 Insurance 2500 Bad debts 1875 Office Expenses 9375 Salaries of works manager 15000 Cash at bank 10250 592500 The following additional information is to be taken into consideration: 592500…
The Pen, Evan, and Torves Partnership has asked you to assist in winding-up its business affairs. You compile the following information: 1. The partnership's trial balance on June 30, 20X1, is Cash Accounts Receivable (net) Inventory Plant and Equipment (net) Accounts Payable Pen, Capital Evan, Capital Torven, Capital Total Debit $ 7,200 38,000 27,000 98,400 Profit and loss percentages Preliquidation capital balances $170,600 2. The partners share profits and losses as follows: Pen, 50 percent; Evan, 25 percent; and Torves, 25 percent. 3. The partners are considering an offer of $112,000 for the firm's accounts receivable, inventory, and plant and equipment as of June 30. The $112,000 will be paid to creditors and the partners in installments, the number and amounts of which are to be negotiated. Decrease LAPs to next highest Credit Required: Prepare a cash distribution plan as of June 30, 20X1, showing how much cash each partner will receive if the partners accept the offer to sell…
The following is the trail Balance of X and Y Co. as on March 31, 2021. The partners sharing profits and losses in the ratio 2:1. Prepare the Income Statement, Profit & Loss Appropriation A/c, Partners' Capital A/c and the Balance Sheet. Particulars Dr. Particulars Cr. 375000 x Capital A/c 112500 Y Capital A/c 50000 Sundry creditors 100000 Sales (net) 50000 Discount Land and Buildings Plant and Machinery 125000 75000 Wages 62500 Opening Stock of Finished Goods 812500 Opening Stock of Raw material Opening Stock of Work in Progress Sundry debtors 6250 45000 Provision for bad debts 3750 125000 Commission 3750 Y's Loan A/c 2250 25000 Carriage inwards 75000 Carriage outwards Factory Expenses 18750 Royalties 3750 Purchase of Raw material (net) 187500 16250 7250 10000 Factory rent & taxes Discount Office rent Insurance 5000 3750 18750 30000 20500 1185000 The following additional information is to be taken into consideration: Bad debts Office Expenses Salaries of works manager Cash at bank…
recognized in Castillo's books. The individual trial balances on Augus 3 On August 1, Castillo and Dagarag pooled their assets to form a partnership, with the firm to take over their business assets and assume the liabilities. Partners' capitals are to be based on net assets transferred after the following adjustments. (Profits and losses are allocated equally). Dagarag's inventory is to be increased by P14,600; an allowance for doubtful accounts of P3,650 and P5,475 are to be set up in books of Castillo and Dagarag, respectively; and accounts payable of P14,600 is to be before adjustments, follow: Castillo Dagarag 273,750 412,450 18,250 125,925 Assets Liabilities What is the capital of Castillo and Dagarag after the above adjustments? a. Castillo, P250,937.50; Dagarag, P281,962.50 b. Castillo, P273,750; Dagar ag, P295,650 C. Castillo, P237,250; Dagarag, P277,400 d. Castillo, P237,250; Dagarag, P295,650
The Pen, Evan, and Torves Partnership has asked you to assist in winding-up its business affairs. You compile the following information: 1. The partnership's trial balance on June 30, 20X1, Is Cash Accounts Receivable (net) Inventory Plant and Equipment (net) Accounts Payable Pen, Capital Evan, Capital Torves, Capital Total Profit and loss percentages Preliquidation capital balances Loss absorption potential (capital balances / loss percent) Decrease highest LAP to next highest: Debit $ 6,800 30,000 22,000 99,700 Decrease LAPS to next highest: $ 158,500 2. The partners share profits and losses as follows: Pen, 50 percent; Evan, 30 percent; and Torves, 20 percent. 3. The partners are considering an offer of $108,000 for the firm's accounts receivable, Inventory, and plant and equipment as of June 30. The $108,000 will be paid to creditors and the partners in Installments, the number and amounts of which are to be negotiated. Required: Prepare a cash distribution plan as of June 30,…
Two sole proprietors, L and M, agreed to form a partnership on January 1, 20x4. The trial balance L M Book Value Fair Value Book Value Fair Value Cash P 40,000 P 40,000 P 30,000 P 30,000 Accounts receivable (net) 60,000 52,000 70,000 56,000 Merchandise Inventory 100,000 94,000 100,000 114,000 Building (net) 280,000 320,000 250,000 280,000 Furniture and Fixtures (net) 60,000 64,000 40,000 44,000 Accounts payable 110,000 110,000 80,000 80,000 Mortgage payable 200,000 200,000 150,000 150,000 L, Capital 230,000 M, Capital 260,000 The LM partnership will take over the assets and assume the liabilities of the proprietors as of January 1, 20x4. Determine the total assets after formation of the partnership
On April 1, 20Y1, Whitney Lang and Eli Capri form a partnership. Lang agrees to invest $8,100 cash and merchandise inventory valued at $21,900. Capri invests certain business assets at valuations agreed upon, transfers business liabilities, and contributes sufficient cash to bring his total capital to $54,000. Details regarding the book values of the business assets and liabilities, and the agreed valuations, follow: Capri's LedgerBalance Agreed-UponBalance Accounts Receivable $12,400 $10,000 Allowance for Doubtful Accounts 500 600 Merchandise Inventory 14,400 19,300 Equipment 24,300 23,600 Accumulated Depreciation-Equipment 8,100 Accounts Payable 4,400 4,400 Notes Payable (current) 2,700 2,700 The partnership agreement includes the following provisions regarding the division of net income: interest of 10% on original investments, salary allowances of $24,300 (Lang) and $14,800 (Capri), and the remainder equally. Required: 1. Journalize…
The following information relates to partner for the year ended 29 February 2020: Current account credit balance on 29 February 2020 20 000 Profit share 50 000 Salaries 180 000 Interest on capital 24 000 Drawings 220 000 Interest on drawings 2 000 What is the balance in the Current account of the partner on 01 March 2019? OA. R12 000 DR. B. R116 00O DR OC. R52 000 CR D. R12 000 CR S Type here to search
The Taurin Partnership (a calendar-year-end entity) has the following assets as of December 31 of the current year: Таx Basis FMV $ 49,800 16,600 $ 49,800 33,200 128,400 $ 211,400 Cash Accounts receivable Inventory 87,000 Totals $ 153,400 On December 31, Taurin distributes $16,600 of cash, $11,067 (FMV) of accounts receivable, and $42,800 (FMV) of inventory to Emma (a one-third partner) in termination of her partnership interest. Emma's basis in her partnership interest immediately prior to the distribution is $43,533. c1. If Emma's basis before the distribution was $60,033 rather than $43,533, what is Emma's recognized gain or loss? c2. What is her basis in the distributed assets? Complete this question by entering your answers in the tabs below. Req C1 Req C2 What is her basis in the distributed assets? (Do not round intermediate calculations. Round your final answers to the nearest whole dollar amount.) Basis Cash Accounts receivable Inventory
Items 18 to 20 are based on the following data. The partnership business of John Estrada and Peter Arroyo was formed on January 2, 2020. At that date, the following assets were invested as derived from their respective sole proprietor's books. Book of Estrada Book of Arroyo 160,000 Cash. .P145,000 Accounts receivable. 80,000 50,000 Allowance for doubtful accounts. (5,000) (3,000) Merchandise inventory. 200,000 190,000 Partner's agreement as follows: 1. Estrada and Arroyo's adjusted capital contributions must be equal. In the event that one's contribution will exceed the other, any one of them shall withdraw "Cash" from their respective investment. 2. Their respective Accounts receivable should have a probability of collections. 80% for Estrada and 90% for Arroyo. 3. Merchandise inventory will be caried in the partnership book "as is". 4. Prepaid expense of P20,000 should be recognized for Estrada and P5,000 Accrued expenses for Arroyo. 18. How much is the adjusted capital contribution…
ABC, a sole proprietor, agreed to form a partnership with EFG in a business. Accounts in the ledger for ABC on September 30, 2021, just before the formation show the following balances: P 26,000 120,000 180,000 Accounts Payable АВС, Саpital P 62,000 264,000 Cash Accounts Receivable Merchandise Inventory It is agreed that for purposes of establishing ABCS interest, the following adjustments should be made: An allowance for doubtful accounts of 2% of accounts receivable is to be established. The merchandise inventory is to be valued at P202,000. Prepaid expenses of P6,500 and accrued liabilities of P4,000 are to be established. EFG is to invest sufficient funds in order to receive a 1/3 interest in the partnership. How much must EFG contribute? 4.