Rodrigo and Harry are both owners of an existing single proprietorship businesses. They agreed to combine their businesses into a partnership. They agreed to start a total capitalization of P400,000 to be contributed equally, Balances per individual Statement a Financial Position Cash Assets Noncash assets Liabilities Equity Rodrigo 20,000 85,000 105,000 Harry 5,000 135,000 10,000 130,000 They also agreed to the following valuation of their businesses' non-cash assets. . Noncash assets should be valued at 80%. . Liabilities will not be absorbed by the partnership. How much additional cash should be contributed by Rodrigo & Harry respectively?
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- Jane and Kathy are joining their separate business to form a partnership. Cash and non-cash assets are to be contributed for a total capital of P300,000. The non-cash assets are to be contributed and liabilities to be assumed are as follows: Jane Kathy Book Value Fair Value Book Value Fair Value Receivable Inventories Equipment Payable P 22,500 22,500 37,500 11,250 P 22,500 33,750 30,000 11,250 P 60,000 67,500 7,500 P67,500 71,250 7,500 The partner's capital accounts are to be equal after all contributions of assets and assumptions of liabilities. Determine the total assets of the partnership.Mighty Darrel and Super Zigg formed a partnership and agreed to have an equal interest in thepartnership’s assets. They agreed to make the following contributions : Darrel contributed 100,000and Zigg contributed 84,000 in identifiable assets. Under the bonus approach, what is the amount ofbonus from Darrel to Zigg capital? A. 46,000B. 16,000C. 8,000D. 0A is the owner of an existing single proprietorship with net assets of 50,000. they agreed torecord the assets and liabilities of A’s business at book value. The book value of A’s businessliability is 60,000. B and C will contribute equally in cash 60% of the total capitalization based onthe capital contribution of A. the capital contribution of B should be A. 37,500B. 75,000C. 82,500D. 165,000
- A, B and C are partners sharing profits and losses in the ratio of 3 : 2 :1 respectively. With effect from 1.4.2015 they decided to share future profits equally. For this purpose the assets and liabilities were revalued as under : Particulars Old Values ($) Revised Values ($) 30,000 54,000 24,500 14,70,000 50,800 Furniture 28,000 Computers Land and Buildings Machinery Sundry Creditors 12,90,000 46,500 34,870 30,860 Prepare Revaluation Account and give necessary journal entries for recording the above changes in assets and liabilities.Items 34 and 35 are based on the following information: On January 2,2010, Jason and Melissa formed a partnership by contributing the following assets: Cash Accounts Receivable Merchandise Inventory Land Building Jason P ? 80,000 100,000 Melissa 34. On January 2, 2010, Melissa, Capital amounts to a. P440,000 b. P600,000 P 380,000 240,000 The Land invested by Melissa is subject to mortgage loan of P160,000, which is to be assumed by the partnership. The accounts receivable invested by Jayson are believed to be only 90% collectible. d. P1,040,000 35. Assuming that Jayson is to contribute enough cash to bring his capital equal to that of Melissa, required cash contribution of Jayson is a. P268,000 b. P420,000 d. P600,000 c. P760,000 c. P440,000Even though abel donated P100,000 and Carr supplied P84,000 in recognised assets, Johney and Carr established a partnership and decided to distribute initial funds evenly. Carr's unidentified assets should be deducted using the bonus method approach to capital account adjustment. 46,00016,0008,0000
- Lourdes and Annie are combining separate businesses to form a partnership. Cash and noncash assets are to be contributed for a total capital of P300,000. The noncash assets to be distributed and the liabilities to be assumed are: Lourdes Annie Book Value Fair Value Book Value Fair Value Accounts Receivable P20,000 P20,000 Inventories 30,000 40,000 P20,000 P25,000 Equipment 60,000 45,000 40,000 50,000 Accounts Payable 15,000 15,000 10,000 10,000 The partner's capital accounts should be equal after all contributions of assets and the assumption of liabilities. Required: A. Prepare journal entries to record the investments of Lourdes and Annie in the books of the partnership. B. Prepare the statement of financial position of the partnership on July 18, 2018, the date of the formation.Mai is going to contribute the following assets to a business entity in exchange for an ownership interest. Adjusted Basis FMV Cash $100,000 $100,000 Land and building 60,000 95,000 What are the tax consequences of the contribution to Mai if the business entity is a(n): a. Sole proprietorship? b. General partnership? c. Limited partnership? d. C corporation? e. S corporation?The following information was obtained from the records of Alben Traders, a partnership business with Albert and Bennie as partners, after the net profit of R546 000 was appropriated between the partners: Partners' salaries R480 000; Interest on drawings R6 000; Total share of the remaining loss R48 000. Which of the following reflects the value of the interest on capital? • A. R24 000 O B. R108 000 O C. R972 000 O D. R120 000
- AA and BB are partners engaged in a manufacturing business. Transactions affecting the partners’ capital accounts in 2022 are as follows: AA BB Debit Credit Debit Credit Beg. Balance P250,000 P350,000 April 1 150,000 100,000 June 30 125,000 250,000 September 1 225,000 300,000 October 1 350,000 200,000 The income summary has a debit balance of P225,000. Agreement between AA and BB are as follows: Interest on average capital at 8%. Salaries of P125,000 and P175,000 are given to AA and BB, respectively. Bonus to BB at 25% of net income after deducting interest and salaries but before deducting bonus. Balance is to be divided equally. How much is the net increase (decrease) in BB’s capital account in 2022?James joined a partnership by contributing the following: cash, P20,000;accounts receivable, P4,000; land, P240,000 fair value; and accounts payable, P16,000. What will be the initial amount recorded in James’ capital account? Give the entry to record the investment of JamesAquino and Asuncion have decided to form a partnership. Aquino invests the assets presented below at their agreed valuation, and also transfers his liabilities to the new firm. Ledger Balances P450,000 Agreed Valuation P 450,000 180,000 10,000 270,000 125,000 Cash Accounts Receivable Allowance for Uncollectible Accounts Merchandise Inventory Equipment Accumulated Depreciation Accounts Payable Notes Payable 180,000 15,000 300,000 180,000 30,000 105,000 90,000 105,000 90,000 Asuncion agrees to invest cash for a one-third interest in the firm. Instructions: 1. Prepare the entries to record the investments of Aquino and Asuncion in the partnership's new set of books. 2. Prepare the entries to adjust and close the balances of accounts in the books of Aquino.