Ne il a n d J u stin a g re e d to fo rm a p a rtn e rsh ip a n d c o n trib u te c e rta in a sse ts.

Ne il c o n trib u t e s c a sh a m o u n tin g to P250,000 a n d a la n d w h ic h h e

p u rc h a se d 3 ye a rs a g o fo r P250,000 b u t c u rre n t ly h a s a fa ir m a rke t
v a lu e o f P500,000. J u stin o n th e o th e r h a n d c o n trib u te s c a sh o f P100,000
a b u ild in g w ith a c a rryin g a m o u n t o f 500,000 b u t b o th a g re e d to v a lu e
it a t P600,000. Th e sa id b u ild in g h a s a m o rtg a g e p a ya b le w h ic h th e
p a rtn e rsh ip w ill a ssu m e , P350,000. Th e p a rtn e rs w ill sh a re p ro fits a n d
lo sse s e q u a lly.

Re q uire d : Pre p a re th e jo u rn a ls e n trie s to a c c o u n t th e in v e stm e n t m a d e b y th e

p a rtn e rs.
Cash 250,000.00
Land 500,000.00
Neil Capital 750,000.00

Cash 100,000.00
Building 600,000.00
Mortgage Payable 350,000.00
Justin Capital 350,000.00

Actual ContributCredited Capital

Neil 750,000.00 550,000.00 50%
Justin 350,000.00 550,000.00 50%
1,100,000.00 1,100,000.00

Neil Capital 200,000.00

Justin Capital 200,000.00
- 200,000.00
200,000.00
Inventory 480,000.00
Land 1,250,000.00
Cash 1,930,000.00
Notes Payable 300,000.00
Dexter Capital 1,680,000.00
Waylon Capital 1,680,000.00

Inventory 480,000.00
Land 1,250,000.00
Cash 250,000.00
Notes Payable 300,000.00
Dexter Capital 1,680,000.00

Cash 1,680,000.00
Waylon Capital 1,680,000.00
Inventory 480,000.00
Land 1,250,000.00
Cash 250,000.00
Total 1,980,000.00
Notes Payable 300,000.00
Net Investment 1,680,000.00 1,930,000.00
 Pro b le m 3

O n Ap ril 10 2019, Va n e ssa w h o h a s h e r o w n re ta ilin g b u sin e ss a n d J o rd a n ,

a g re e d to fo m a p a rtn e rsh ip w h e re in th e y w ill d iv id e p ro fits in th e ra tio
70:30, re sp e c tiv e ly. Th e sta t e m e n t o f fin a n c ia l p o sitio n o f Va n e ssa is a s
fo llo w s:

Va ne ssa Me rc ha nd ising

Sta te m e nt o f Fina nc ia l Po sitio n

As o f Ap ril 10, 2019

ASSETS

C a sh 4,000.00

Ac c o u n ts Re c e iv a b le 160,000 .00

Le ss: Allo w a n c e fo r Un c o lle c tib le Ac c o u n ts 16,000.00 144,000.0 0

In ve n to ry 200,000.0 0

Eq u ip m e n t 50,000.00

Le ss: Ac c u m u la t e d De p re c ia tio n 10,000.00 40,000.0 0

To ta l Asse ts 388,0 00.00

LIABILITIES AND CAPITAL

Ac c o u n ts Pa ya b le 36,000.0 0

Va n e ssa C a p ita l 352,000.0 0

To ta l Lia b ilitie s a nd Ca p ita l 388,0 00.00

C o n d itio n s a g re e d u p o n b e fo re th e fo rm a t io n o f th e p a rtn e rsh ip a re a s

fo llo w s:

a. Th e a c c o u n ts re c e iv a b le o f Va n e ssa is e stim a te d to b e 75%

re a liza b le .

b. Th e a c c u m u la t e d d e p re c ia tio n o f th e e q u ip m e n t w ill b e
in c re a se d b y P12,500.

c. Th e a c c o u n ts p a ya b le w ill b e a ssu m e d b y th e p a rtn e rsh ip .

d. Th e in v e n to ry w ill b e d e c re a se d to P190,000.

e. Th e c a p ita l o f th e p a rtn e rsh ip is b a se d o n th e a d ju st e d c a p ita l

b a la n c e o f Va n e ssa . J o rd a n is to c o n trib u te c a sh in o rd e r to m a ke
BOOKS OF VANESSA
a Vanessa Capital 24,000.00
Allowance for Uncollectible Accounts 24,000.00

b Vanessa Capital 12,500.00

Accumulated Depreciation 12,500.00

d Vanessa Capital 10,000.00

Inventory 10,000.00

Closing Entry
Accounts Payable 36,000.00
Vanessa Capital 305,500.00
Allowance for Uncollectible Accounts 40,000.00
Accumulated Depreciation 22,500.00
Cash 4,000.00
Accounts Receivable 160,000.00
Inventory 190,000.00
Equipment 50,000.00

BOOKS OF PARTNERSHIP
Cash 4,000.00
Accounts Receivable 160,000.00
Inventory 190,000.00
Equipment 27,500.00
Accounts payable 36,000.00
Allowance for Uncollectible Accounts 40,000.00
Vanessa Capital 305,500.00

Cash 130,928.57
Jordan Capital 130,928.57

120000
40000
Unadjusted Balance 352,000.00
a - 24,000.00
b - 12,500.00
d - 10,000.00
Adjusted Balance 305,500.00

Vanessa 305,500.00 70%

Jordan 130,928.57 30%
Total Capital 436,428.57 100%

120000

120000
40000
24000
 Pro b le m 4 BOOKS OF A
A a n d B a g re e d to fo rm a p a rtn e rsh ip c o n trib u tin g th e ir a sse ts a n d e q u ity a
fro m th e ir p re v io u s so le p ro p rie to rsh ip b u sin e ss. Th e b a la n c e sh e e t o f A a n d
Ba re a s fo llo w s:

A B b
C a sh 11,000.00 22,000.0 0

Ac c o u n ts Re c e iva b le 235,000 .00 565,000.00

c
In v e n to rie s 120,000 .00 260,000.00

La n d 600,000 .00 -

Bu ild in g - 428,000.00 Closing Entries

Fu rn itu re s a n d Fixtu re s 50,000.00 35,000.0 0

O th e r Asse ts 2,000.00 3,600.00

To ta l 1,018 ,000 .00 1,313 ,600 .00

Ac c o u n ts Pa ya b le 180,000 .00 245,000.00

No te s Pa ya b le 200,000 .00 325,000.00

A, C a p ita l 638,000 .00 743,600.00

B, C a p ita l

To ta l 1,018 ,000 .00 1,313 ,600 .00

PARTNERSHIP BOOKS
Bo th p a rtn e rs a g re e d to th e fo llo w in g c o n d itio n s:

a . Ac c o u n ts re c e iv a b le s a m o u n t in g to P25,000 a n d P35,000 in th e b o o ks o f
A a n d B re sp e c tiv e ly a re u n c o lle c tib le .

b . In v e n to rie s o f P5,000 a n d P6,7000 a re w o rth le ss in A a n d B’s re sp e c tiv e

b o o ks.

c . O th e r a sse ts o f P2,000 fo r A a n d P3,500 fo r B a re to b e w ritte n o ff.

d . All lia b ilitie s in th e re sp e c tiv e b o o ks o f A a n d B w ill b e a ssu m e d b y th e

p a rtn e rsh ip .

Re q uire d : Pre p a re a ll n e c e ssa ry jo u rn a l e n trie s in th e b o o ks o f th e p a rtn e rs a n d

in th e b o o ks o f th e p a rtn e rsh ip .
BOOKS OF A BOOKS OF B
A capital 25,000.00 a
Allowance for Uncollectible Accounts 25,000.00

A Capital 5,000.00 b
Inventory 5,000.00

A Capital 2,000.00 c
Other Assets 2,000.00

Closing Entries
Accounts Payable 180,000.00
Notes Payable 200,000.00
Allowance for Uncollectible Accounts 25,000.00
ACapital 606,000.00
Cash 11,000.00
Accounts Receivable 235,000.00
Inventories 115,000.00
Land 600,000.00
Furnitures and Fixtures 50,000.00

PARTNERSHIP BOOKS
Cash 11,000.00
Accounts Receivable 235,000.00
Inventories 115,000.00
Land 600,000.00
Furnitures and Fixtures 50,000.00
Accounts Payable 180,000.00
Notes Payable 200,000.00
Allowance for Uncollectible Accounts 25,000.00
A Capital 606,000.00

Cash 22,000.00
Accounts Receivable 565,000.00
Inventories 253,300.00
Building 428,000.00
Furnitures and Fixtures 35,000.00
Other Assets 100.00
Accounts Payable 245,000.00
Notes Payable 325,000.00
Allowance for Uncollectible Accounts 35,000.00
B Capital 698,400.00
BOOKS OF B
B Capital 35,000.00
Allowance for Uncollectible Accounts 35,000.00

B Capital 6,700.00
Inventory 6,700.00

B Capital 3,500.00
Other Assets 3,500.00

Accounts Payable 245,000.00

Notes Payable 325,000.00
B Capital 698,400.00
Allowance for Uncollectible Accounts 35,000.00
Cash 22,000.00
Accounts Receivable 565,000.00
Inventories 253,300.00
Building 428,000.00
Furnitures and Fixtures 35,000.00
Other Assets 100.00