CASE 1 (22 points: 4 problem solving; 1 journal entry) On May 1, 20x1, the statement of financial position of Juan and Pablo appear below: Juan Pablo Cash 22,000 469,072 240,070 1,206,000 44,708 1,135,780 520,204 Accounts receivable Inventories Land Building Furniture and fixtures 100,690 4,000 2,041,832 856,534 69,578 7,200 2,634,004 Other assets Total assets 487,300 690,000 Accounts payable Notes payable Juan, Capital Pablo, Capital Total liabilities and equity 357,880 400,000 1,283,952 2,041,832 1,456,704 2,634,004 Juan and Pablo agreed to form a partnership contributing their respective assets and equities subject to the following adjustments: a. Accounts receivable of P40,000 in Juan's books and P70,000 in Pablo's books are uncollectible. b. Inventories of P11,000 and P13,400 are worthless in Juan's and Pablo's respective books. c. Other assets of P4,000 and P7,200 in Juan's and Pablo's respective books are to be written off.
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.
Required:
3. Prepare
4. During the first year of operations, the
and loss
Drawings were made in these amounts: Juan, P100,000; Pablo, P130,000; Pedro – P56,000. What is
the capital balance of Pedro after the first year?
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