1) Prepare the journal entries necessary to open the records of the partnership. 2) Assuming that the partnership makes a profit of $95 000 for the year ended 30 June 2022, prepare the journal entries to record the allocation of profit. Retained Earnings accounts are not used.
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- KATY, a sole proprietor wanted to expand her profitable business but she does not have enough resources. So, she thought of inviting PERRY to join her and formed a partnership on April 1, 2020. Just before admission, KATY had the following assets and liability accounts: Cash - ₱420,000; Accounts receivable -₱380,000; Inventories -₱250,000;Notes payable -₱100,000. PERRY agreed to contribute cash equal to 30% of KATY’s capital after considering the following adjustments: (a) 2% allowance for bad debts should be recognized, (b) the inventories have fair market value equal to 120% of the balance. How much should Perry contribute to the partnership?KATY, a sole proprietor wanted to expand her profitable business but she does not have enough resources. So, she thought of inviting PERRY to join her and formed a partnership on April 1, 2020. Just before admission, KATY had the following assets and liability accounts: Cash - ₱420,000; Accounts receivable -₱380,000; Inventories -₱250,000; Notes payable -₱100,000. PERRY agreed to contribute cash equal to 30% of KATY’s capital after considering the following adjustments: (a) 2% allowance for bad debts should be recognized, (b) the inventories have fair market value equal to 120% of the balance. How much is the total assets of the partnership after the formation? *Victoria, Wilda and Xenia are partners in a consultancy firm which commenced its operation on July 1, 2018. Victoria is the managing partner. As per agreement for sharing profits, the managing partner will receive a salary of P12,000 per month and the remaining profit will be shared by the partners equally. On December 31, 2018, the firm determined that its income was P 300,000. How much will Wilda receive as her share in the profit? A. P 76,000 B. P 96,000 C. P 52,000 D. P 84,000
- Ahmed and Salim form a partnership on June 1. Ahmed contributes OMR 15,000 cash, inventory with a market value of OMR 40,000 , and Accounts Payable of OMR 80,000. Ahmed also contributed computer equipment with a cost of OMR 80,000 and accumulated depreciation of OMR 20,000 . Current market value is OMR 85,000 Ahmed's Capital will be Select one: O a. Credit, 30,000 O b. Credit, 60,000 O c. Debit, 30,000 O d. Debit, 60,000In January 2018, Nick Marasigan and Dems Asacta agreed to purchase and sell chocolate candies. Marasigan contributed P2,400,000 in cash to the business. Asacta contributed the building and equipment, valued at P 2,200,000 and P 1,400,000, respectively. The partnership had profits of P480,000 during 2018 but was less successful during 2019, when profit was only P400,000. Required:1. Prepare the journal entry to record the investment of both partners in the partnership.2. Determine the share of profit for each partner in 2018 and 2019 under each of the following conditions:a. The partners agreed to share profit equally.b. The partners failed to agree on a profit-sharing arrangement.c. The partners agreed to share profit according to the ratio of their original investments.d. The partners agreed to share profits by allowing interest of 10% on their original investments and dividing the remainder equally.e. The partners agreed to share profits by allowing salaries of P400,000 for Marasigan…Lawler and Riello formed a partnership on March 15, 2024. The partners agreed to contribute equal amounts of capital. Lawler contributed her sole proprietorship's assets and liabilities (credit balances in parentheses) as follows: X Data table Lawler's Business Current Market Value its. Select the explanation on the last line of the journal entry table.) Accounts Receivable 10,600 Merchandise Inventory 29,000 Prepaid Expenses 2,800 Credit 26,000 Store Equipment, Net Accounts Payable (25,000) Done More info On March 15, Riello contributed cash in an amount equal to the current market value of Lawler's partnership capital. The partners decided that Lawler will earn 60% of partnership profits because she will manage the business. Riello agreed to accept 40% of the profits. During the period ended December 31, the partnership earned net income of $70,000. Lawler's withdrawals were $36,000, and Riello's withdrawings totaled $26,000. Print Done Requirement 1. Journalize the partners' initial…
- On June 1, 2020, Jill Bow and Aisha Adams formed a partnership to open a gluten-free commercial bakery, contributing $298,000 cash and $396,000 of equipment, respectively. The partnership also assumed responsibility for a $58,000 note payable associated with the equipment. The partners agreed to share profits as follows: Bow is to receive an annual salary allowance of $168,000, both are to receive an annual interest allowance of 5% of their original capital investments, and any remaining profit or loss is to be shared 40/60 (to Bow and Adams, respectively). On November 20, 2020, Adams withdrew cash of $118,000. At year-end, May 31, 2021, the Income Summary account had a credit balance of $560,000. On June 1, 2021, Peter Williams invested $138,000 and was admitted to the partnership for a 20% interest in equity. Required: 1. Prepare journal entries for the following dates. a. June 1, 2020 b. November 20, 2020 c. May 31, 2021 d. June 1, 2021 2. Calculate the balance in each…On January 2, 2021, Abel, Cain and Josuah formed a partnership. Abel contributed cash of P 100,000 and a delivery equipment that originally costs him P 120,000, but with a secondhand value of P500,000. Cain contributed P 160,000 in cash. Josuah, whose family sells office equipment, contributed P 50,000 in cash and office equipment that cost his family's dealership P 100,000 but with a regular selling price of P 120,000,the partnership reported net income of P 120,000. On December 31, 2021, what would be the capital balance of the partners? Abel Php257,000 Cain Php200,000 A Josuah Php192,500 Abel Php187,500 Cain Php200,000 Josuah Php212,500 Abel Php190,000 (c) cain Php200,000 Josuah Php210,000 Abel Php260,000 D Cain Php200,000 Josuah Php190,000The following transactions of Best Pizza owned by Reyes, Ortiz and Flores, took place from March 1 to May 31, 2019March 1 Reyes who owns an ice cream parlor invested cash of P80,000 and merchandise costing P120,000 but with a fair value of P70,000.Customers' accounts of P50,000 were also taken over by the partnership at its realizable value of 80%. (Recognize an allowance for doubtful accounts for 20% of cost)Ortiz invested cash of 40,000 and pieces of furniture costing 150,000 which the partners agree to be 50% depreciated to arrive at its fair value.May 1 Flores an expert in pizza making invested imported cooking equipment costing P350,000 but which fair value drop by 40% of its cost flores made a down payment of P200,000 when this was purchased and issued a note for the balance half of which is still unpaid. partnersbagreed that the liability will be assumed by the partnership.May 31 Partners agreed that additional cash investments be made so that all partners will have an equal…
- Sasha and Michelle form a partnership. Sasha contributes $13,000 cash and merchandise inventory with a current market value of $3,000. While journalizing this transaction OA. Merchandise Inventory will be credited for $3,000 B. Merchandise Inventory will be credited for $2,200 OC. Merchandise Inventory will be debited for $2,200 OD. Merchandise Inventory will be debited for $3,000Tasneem and Nazreen were friends with similar hobbies. they formed a partneship with a written partnership agreement to trade in pastry and related products as Tasnaz’s Pastry. The following were extracted from their accounting records; Balances in the ledger at 30 June 2021 R Capital: Tas 407000 Capital: Naz 363000 Current account: Tas credit balance at 1 July 2020 8052 Current account: Naz: debit balance at 1 July 2020 2640 Drawings : Tas 88000 Drawings : Naz 140000 Profit for the year 438636 Additional Information:The partnership agreement provides for the following that needs to be taken into account:1. Partners are entitled to salaries as follows:• Tas – R8 000 per month,• Naz – R10 000 per month. 2. Interest on capital accounts are allowed at 12% per year on each partners capital on a pro-rata basis. Note the following that on 1 January 2021:• Tas decreased her capital account by R27 000; and• Naz increase her capital account by R17 000. 3. Interest at 10%…On March 1, 20Y8, Eric Keene and Renee Wallace form a partnership. Keene agrees to invest $23,400 in cash and merchandise inventory valued at $62,600. Wallace invests certain business assets at valuations agreed upon, transfers business liabilities, and contributes sufficient cash to bring her total capital to $60,000. Details regarding the book values of the business assets and liabilities, and the agreed valuations, follow: Wallace's Ledger Balance Agreed-Upon Valuation Accounts Receivable $19,900 $19,500 Allowance for Doubtful Accounts 1,200 83,5001 29,800 15,000 37,500 1,400 Equipment Accumulated Depreciation-Equipment Accounts Payable Notes Payable (current) 55,400 15,000 37,500 The partnership agreement includes the following provisions regarding the division of net income: interest on original investments at 10%, salary allowances of $19,000 (Keene) and $24,000 (Wallace), and the remainder equally. Instructions 1. Journalize the entries to record the investments of Keene and…