On March 1, 2018, X and Y formed a partnership. The partners contributed the following: Y Cash 500,000.00 400,000.00 Accounts receivable 300,000.00 200,000.00 Allowance for doubtful accounts (50,000.00) 150,000.00 (20,000.00) 100,000.00 200,000.00 Inventory Equipment Accumulated depreciation 500,000.00 100,000.00 25,000.00 Accounts payable 50,000.00 400,000.00 Note payable 200,000.00
Partnership Accounting
A partnership is a kind of arrangement between two or more people whereby they agree to manage the business operations and share its profits and losses in an agreed ratio between them. The agreement that is drafted and signed by the partners of the firm is termed as partnership deed and contains various important clauses agreed between the partners such as profit/loss sharing, interest on capital, remuneration allocation of each partner, drawings, admission of a new partner, etc.
Partner Admission and Withdrawal
A partnership is a kind of arrangement between two or more people whereby they agree to manage the business operations and share its profits and losses in an agreed ratio between them. The agreement that is drafted and signed by the partners of the firm is termed as a partnership deed and contains various important clauses agreed between the partners such as profit/loss sharing, interest on capital, remuneration allocation of each partner, drawings of a partner, etc.
On March 1, 2018, X and Y formed a
The partners agree on the following:
a. P10,000 of the
b. An allowance for doubtful accounts of 15% is to be established on the remaining receivables 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 of Y 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
g. The partners agree to bring their capital balance proportionate to their profit and loss ratio.
Requirement:
1. If Y's Capital is to be used as basis, how much is the adjusted capital of X after the formation?
2. What is the total assets of the partnership immediately after the formation?
3. If the
Trending now
This is a popular solution!
Step by step
Solved in 4 steps
