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Opening Entries (Partnership Books) : (80 000 X 10%) Decrease in Allowance 72 000

1) Case 1 summarizes the opening entries for a partnership, recording the partners' capital contribution of $80,000 after accounting for a $30,000 mortgage on a building valued at $100,000. 2) Case 2 records the purchase of a truck for $16,000 and a garage for $55,000, totaling $79,000. 3) Case 3 shows the capital accounts of two partners, Efren Awayan and Bayani Nadua. Adjusting entries are made to Efren's accounts to reduce accounts receivable by $8,000 and inventory by $5,000. Adjustments are also made to Bayani's accounts to reduce accounts rece

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207 views3 pages

Opening Entries (Partnership Books) : (80 000 X 10%) Decrease in Allowance 72 000

1) Case 1 summarizes the opening entries for a partnership, recording the partners' capital contribution of $80,000 after accounting for a $30,000 mortgage on a building valued at $100,000. 2) Case 2 records the purchase of a truck for $16,000 and a garage for $55,000, totaling $79,000. 3) Case 3 shows the capital accounts of two partners, Efren Awayan and Bayani Nadua. Adjusting entries are made to Efren's accounts to reduce accounts receivable by $8,000 and inventory by $5,000. Adjustments are also made to Bayani's accounts to reduce accounts rece

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Case 1:

Opening Entries (Partnership Books)


Cash 10 000
Building 100 000
Mortgage Payable 30 000
Partnership Capital 80 000
To record partner’s capital balance

Case 2:
Cash $ 8 000
Truck $ 16 000
Garage $ 55 000
$ 79 000

Case 3:

Efren Awayan Bayani Nadua


Cash 150 000 Cash 120 000
A/R 80 000 A/R 95 000
Merchandise 130 000 Merchandise 180 000

Adjusting Entry:
Efren Awayan

1. A, Capital 8 000
Allow. for Doubtful Accts. 8 000
#
A/R net per book 80 000 (overvalued)
A/R as agreed 8 000
(80 000 x 10%)
Decrease in allowance 72 000

2. A, Capital 5 000
Merchandise 5 000
#
Merch. per book 130 000 (overvalued)
Merch. as agreed 125 000
Decrease in inventory 5 000
3. Prepaid Insurance 15 000
A, Capital 15 000
#
Adjusting Entry:
Bayani Nadua

1. N, Capital 14 250
Allow. for Doubtful Accts. 14 250
#
A/R net per book 95 000(overvalued)
A/R as agreed 14 250
(95 000 x 15%)
Decrease in allowance 80 750

2. N, Capital 10 000
Merchandise 10 000
#
Merch. per book 180 000
Merch. as agreed 170 000
Decrease in inventory 5 000

3. N, Capital 10 000
Accrued expense 10 000
#
Computation:
Efren Awayan, Capital Account Bayani Nadua, Capital Account
Debit Credit Debit Credit
8 000 15 000 14 250 395 000
5 000 360 000 10 000
13 000 375 000 10 000
362 000 34 250 395 000
360 750

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