(Xii) PARTNERSHIP-FORMATION
Uploaded by
Alina niaz(Xii) PARTNERSHIP-FORMATION
Uploaded by
Alina niazR
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I.Com(2) Accounting PPT Slides by Sir Irfan
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Cell# 0347-3643211
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I.COM(2) ACCOUNTING
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ONLINE/PHYSICAL CLASSES WORKSHEET
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(With solution or Answer key)
Topic: PARTNERSHIP - Formation
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1- The main feature of these slides is the ANSWER KEY to every question given.
2- Solutions to some questions are also given.
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3- Booklet questions are also given in the last slides.
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4- Complete slides of all other topics are also available.
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5- Other subjects NOTES, TARGET PAPERS (with answers) available.
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6- ONLINE AND PHYSICAL classes are also available.
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I.Com(2) Accounting PPT Slides by Sir Irfan
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Cell# 0347-3643211
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PARTNERSHIP - FORMATION
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A partnership Formation(also known as a general partnership) is an informal business structure consisting of two or
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more people. You don't have to file paperwork to establish a partnership, you create a partnership simply by
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agreeing to go into business with another person.
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POINTS TO BE NOTED:
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In this case of a partnership, we find out the contribution of each partner in a new partnership firm.
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All Assets should be debited, and liabilities should be credited when we find investment of each partner.
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We have to take all assets or liabilities as an agreed value and book value mentioned in the question.
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Required in the exam:
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1- Computation
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2- General journal entries
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3- Balance sheet
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(KARACHI BOARD)
PAST PAPER QUESTION
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Cell# 0347-3643211
PARTNERSHIP – FORMATION
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I.Com(2) Accounting PPT Slides by Sir Irfan
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2023RP Q#9(LONG)
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Mr. Shahbaz and Mr. Abdullah agreed to form a partnership firm SA Traders as on January 01, 2022.
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Title of accounts Mr. Shahbaz Mr. Abdullah
Cash 17000 15000
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Accounts Receivable 50000 32000
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Merchandise Inventory 25000 28000
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Equipment 30000 20000
Allowances for depreciation 5000 2000
Allowances for bad debts 5000 4000
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Accounts payable 12000 24000
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The partners agreed to the following values.
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Mr. Shahbaz:
Accounts receivable be estimated to realize Rs.42,000. Merchandise inventory be valued at Rs.25,000. Equipment be valued at Rs.20,000.
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1/3 of the accounts payable be accepted.
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Mr. Abdullah:
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Accounts receivable be estimated to realize Rs.26,000. Merchandise inventory be valued at Rs.24,000. Equipment be valued at Rs.15,000.
1/2 of the accounts payable be accepted. It was also decided that Mr. Abdullah invest sufficient cash to give him equal interest with Mr.
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Shahbaz.
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Required:
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1) Give entries in General Journal of above transactions. 4
2) Prepare Balance Sheet of SA Traders on January 01, 2022.
ANSWER KEY Each partner investment=100000 Balance Sheet Rs.216000
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I.Com(2) Accounting PPT Slides by Sir Irfan
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Cell# 0347-3643211
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2022RP Q#7
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On February 1, 2022, Masood and Tariq agreed to merge their businesses and started the partnership under the name of MT
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Traders with the following investments:
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Masood invested cash Rs.50,000; Building costing Rs.500,000 having accumulated depreciation of Rs.150,000 at an agreed
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value of Rs.380,000 and merchandise of Rs.90,000. Accounts payable were Rs.60,000 out of which 1/3 was accepted.
Tariq invested equipment of Rs.200,000 and merchandise worth Rs.120,000 and sufficient cash to make his capital equal to
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that of Masood.
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Required:
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i) Prepare Journal entries of the above investments.
ii) Prepare initial balance sheet of the firm on February 1, 2022.
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I.Com(2) Accounting PPT Slides by Sir Irfan
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-------------------- Partnership
General Journal Entries
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Date Particulars P/R Dr Cr
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Feb-01-2022 Cash 50000
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Building 380000
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Merchandise 90000
Accounts payable 20000
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Capital - Masood 500000
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[ To record investment by Masood in partnership business]
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Feb-01-2022 Cash 180000
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Equipment 200000
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Merchandise 120000
Capital - Tariq 500000
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[ To record investment by Tariq in partnership business]
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I.Com(2) Accounting PPT Slides by Sir Irfan
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Cell# 0347-3643211
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-------------------- Partnership
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Balance Sheet
As on February 01, 2022
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ASSETS Amount Equities Amount
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Current Assets: Liabilities:
Cash 230000 Accounts payable 20000
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Merchandise inventory 210000
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Total current Assets 440000
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Non - current Assets Owner’s Equity
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Building 380000 Capital - Masood 500000
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Equipment 200000 Capital - Tariq 500000
Total Non current Assets
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Total ASSETS 1020000 Total EQUITIES 1020000
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I.Com(2) Accounting PPT Slides by Sir Irfan
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Cell# 0347-3643211
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2018RP Q#5
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On 1st July 2017, Munawar, Muneeb and Mohsin agreed to form a partnership business with a total capital of 24,00,000 to be
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contributed by them in the ratio of 3:2:1 respectively.
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Required:
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a) Find the investment of each partner and record in the General Journal.
b) Prepare the initial balance sheet of the firm
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SOLUTION:
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COMPUTATION OF INVESTMENT MADE BY EACH PARTNERS:
Sum of ratios: 3+2+1=6
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Munawer’s share = 2400000 X 3/6 = 1200000
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Muneeb’s share = 2400000 X 2/6 = 800000
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Mohsin’s share = 2400000 X 1/6 = 400000
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I.Com(2) Accounting PPT Slides by Sir Irfan
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Cell# 0347-3643211
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-------------------- Partnership
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General Journal Entries
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Date Particulars P/R Dr Cr
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July-01-2017 Cash 1200000
Capital – Munawer 1200000
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[ To record investment by Munawer in partnership business]
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July-01-2017 Cash 800000
Capital – Muneeb 800000
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[ To record investment by Muneeb in partnership business]
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July-01-2017 Cash 400000
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Capital – Mohsin 400000
[ To record investment by Mohsin in partnership business]
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Cash
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ASSETS
Total ASSETS
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Amount
2400000
2400000
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Balance Sheet
--------- Partnership
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As on --------------
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Equities
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Total EQUITIES
Owner’s Equity
Capital - Mohsin
Capital - Muneeb
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Capital - Munawar
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800000
400000
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Amount
2400000
1200000
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I.Com(2) Accounting PPT Slides by Sir Irfan
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I.Com(2) Accounting PPT Slides by Sir Irfan
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Cell# 0347-3643211
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2017RP Q#4
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Ghani, Asif and Imran formed a partnership on March 01, 2017, Ghani contributed cash Rs.700,000. Asif invested building
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which he purchased a few years ago for Rs.100,000. The current market value of the Building was Rs.700,000 but partners
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agreed to a value of Rs.600,000. Imran brought a Delivery Truck, value agreed by partners Rs.500,000. It was decided that
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each partner would have equal capital. So, Asif and Imran would bring additional cash to have capital equal to that of Ghani.
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Required:
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Give necessary entries in the General Journal to record the above in the newly formed Partnership Firm.
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ANSWER KEY Investment each partners=Rs.700000
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I.Com(2) Accounting PPT Slides by Sir Irfan
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2016RP Q#8
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On August 01st , 2015 Tariq and Wahid agreed to form a partnership firm with the name of 'TW Construction Company Tariq
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invested Rs.200,000/- and building costing Rs.400,000/- with accumulated depreciation of Rs.120,000/- at an agreed value of
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Rs.300,000/-.
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Wahid invested furniture of Rs.120,000/-, building costing Rs.80,000/- and sufficient cash to make his capital equal to that of
Tariq.
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Required:
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(a) Prepare General entries of the above investment.
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(b) Prepare initial Balance Sheet of the firm on August 1st 2015.
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ANSWER KEY Balance Sheet Rs.1000000
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I.Com(2) Accounting PPT Slides by Sir Irfan
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Cell# 0347-3643211
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2015RP Q#9B (LONG)
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Maheen running a Boutique, form a partnership with Raheen under the name of M.R. Boutique on January 1, 2015. The
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balance sheet data of Maheen's Boutique is as under.
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Cash Rs.50,000 Accounts Receivable Rs.250,000; Allowance for Bad Debts Rs.20,000; Merchandise Inventory Rs.340,000;
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Prepaid Rent Rs.30,000; Store Equipment Rs.500,000; Accumulated Depreciation Rs.100,000; Accounts Payable Rs.97,000 and
Notes Payable Rs.80,000.
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Maheen transfers to the partnership her assets (except prepaid rent) and liabilities on the following values:
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Accounts Receivable Rs.250,000; Merchandise at Rs.300,000; Equipment and Liabilities at book values. Goodwill of Maheen is
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to be recognized at Rs.100,000.
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Raheen invests land Rs.200,000 and buildings Rs.60,000. She also contributes sufficient cash to make her capital equal to that
of Maheen.
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Required:
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Prepare
i) General Journal Entries
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ii) Initial Balance Sheet.
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ANSWER KEY Each partner investment=923000 Balance Sheet Rs.2023000
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I.Com(2) Accounting PPT Slides by Sir Irfan
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2014R Q#3
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On March 1, 2014 following balances relate to the businesses of Mr. Ashar & Mr. Nasr sole traders:
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Title of accounts Mr. Ashar Mr. Nasr
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Cash 150000 280000
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Accounts Receivable 70000 --------
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Allowances for bad debts 6000 -------
Office supplies 25000 40000
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Building 116000 175000
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Furniture 77000 35000
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Allowances for depreciation - Furniture 3000 5000
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Accounts payable 60000 90000
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On this date they decided to merge their business and form a partnership under the name and style of Ashar and Nasr
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partnership and decided as under:
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(i) Mr. Ashar contributed 1/5 of his cash, Account receivable at realizable value of Rs.68,000, office supplies at
Rs.30,000, Building at agreed value of Rs.160,000/- and furniture at its book value. Mr. Ashar paid 1/4 of his liability
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from his private fund.
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(ii) Mr. Nasr sold all of his business assets except Furniture and paid all of his liabilities. He invested Furniture in the
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partnership at its book value and sufficient cash to give him equal interest with Mr. Ashar
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Required:
Prepare entries in the General Journal of A & N Partnership to record the contribution of Ashar and Nasr.
ANSWER KEY Each partner investment Rs.317000
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I.Com(2) Accounting PPT Slides by Sir Irfan
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Cell# 0347-3643211
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2012P Q#5
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Naeem, Amjad and Khalid formed partnership contributing equal amounts of capitals shown below:
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Naeem: Cash Rs.150,000/- and Building worth Rs.750,000/-
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Amjad: Cash Rs.500,000/- and merchandise inventory for the balance
Khalid: Office equipment worth Rs.800,000/- and the balance in cash.
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Required:
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(i) Present entries in the General Journal of the firm.
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(ii) Prepare Balance sheet in classified form on the formation of the partnership firm.
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ANSWER KEY Each partner investment Rs.900000 Balance Sheet = Rs.2700000
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I.Com(2) Accounting PPT Slides by Sir Irfan
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Cell# 0347-3643211
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Naeem, Amjad and Khalid partnership
General Journal Entries
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SNO. Particulars P/R Dr Cr
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1- Cash 150000
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Building 750000
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Capital – Naeem 900000
[ To record investment made by Naeem in partnership business]
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2- Cash 500000
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Merchandise Inventory 400000
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Capital – Amjad 900000
[ To record investment made by Amjad in partnership business]
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3- Cash 100000
Office Equipment 800000
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Capital – Khalid 900000
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VE
VE
VE
[ To record investment made by Khalid in partnership business]
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I.Com(2) Accounting PPT Slides by Sir Irfan
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Cell# 0347-3643211
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Naeem, Amjad and Khalid partnership
Balance Sheet
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As on --------------
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ASSETS Amount Equities Amount
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Current Assets: Owner’s Equity
Cash 750000 Capital - Naeem 900000
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Merchandise inventory 400000 Capital - Amjad 900000
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Total current Assets 1150000 Capital - Khalid 900000
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Non - current Assets
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Machinery 750000
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Office Equipment 800000
Total Non – current Assets
D 1550000
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Total ASSETS 2700000 Total EQUITIES 2700000
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I.Com(2) Accounting PPT Slides by Sir Irfan
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Cell# 0347-3643211
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2011R Q#4
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Shahrukh & Shazaib formed the partnership on January 1, 2007. The partners invest the following assets:
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Title of accounts Shahrukh Shazaib
Cash 140000 170000
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Land 20000 -------
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Building ------- 180000
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Equipment 80000 -------
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Required:
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Record the above transactions in General Journal.
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ANSWER KEY Shahrukh=Rs.240000 and Shahzaib=350000
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I.Com(2) Accounting PPT Slides by Sir Irfan
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Cell# 0347-3643211
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2010RP Q#4
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PARTNERSHIP- FORMATION:
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On February 02, 2010 Rafiq, Rahim and Rashid formed a partnership under the name of WWPF Brothers and agreed to share
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profit and loss in the ratio 1: 2 : 3 respectively. This ratio is determined on the basis of capital contributed by each partner. As
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per agreement, the total capital of the firm shall be Rs.10,80,000.
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Rafiq : Contributed Cash Rs.60,000 and Machinery Rs.120,000.
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EN
EN
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Rahim: Contributed Furniture worth Rs.200,000 and sufficient cash for the balance.
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EN
Rashid: Contributed sufficient cash.
Required:
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Journal Entries in the books of WWPF Brothers
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EN
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EN
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19
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D D D D D
EN EN EN EN EN
VE VE VE VE VE
R R R R R R
D D D D D
EN EN EN EN EN
VE VE VE VE VE
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D D D D D
EN EN EN EN EN
VE VE VE VE VE
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Sum of ratios: 1+2+3=6
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EN EN EN EN EN
VE VE VE VE VE
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D D D D D
Rafiq’s share = 1080000 X 1/6 = 180000
Rahid’s share = 1080000 X 3/6 = 540000
EN EN EN EN EN
Rahim’s share = 1080000 X 2/6 = 360000
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R R R R R R
EN
COMPUTATION OF INVESTMENT BY EACH PARTNERS:
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EN EN EN EN EN
VE VE VE VE VE
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D D D D D
EN EN EN EN EN
VE VE VE VE VE
R R R R
R R R
D D D D D
EN EN EN EN EN
VE VE VE VE VE
R R R R R R
Cell# 0347-3643211
D D D D D
EN EN EN EN EN
VE VE VE VE VE
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I.Com(2) Accounting PPT Slides by Sir Irfan
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I.Com(2) Accounting PPT Slides by Sir Irfan
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Cell# 0347-3643211
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EN
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WWPF BROTHERS
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General Journal Entries
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Date Particulars P/R Dr Cr
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February 02, 2010 Cash 60000
Machinery 120000
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Capital – Rafiq 1800000
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VE
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VE
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EN
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EN
[ To record investment made by Rafiq in partnership business]
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EN
February 02, 2010 Cash 160000
Furniture 200000
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VE
VE
VE
VE
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Capital – Rahim 360000
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EN
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EN
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[ To record investment made by Rahim in partnership business]
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February 02, 2010 Cash 540000
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Capital – Rashid 540000
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EN
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EN
EN
EN
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EN
[ To record investment made by Rashid in partnership business]
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I.Com(2) Accounting PPT Slides by Sir Irfan
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Cell# 0347-3643211
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2009RP Q#4A
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Mumtaz, Ishaq and khurshid agreed to form a partnership business with capital contribution in the form of
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cash and in the ratio of 3:2:1 respectively. Ishaq invests Rs.75000 as his share of capital contribution.
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Required:
Find the investment of each partner and record in General Journal.
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Sum of ratio = 3+2+1 = 6
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Ishaq investment Rs.75000
Share of Ishaq 2
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Total capital of the firm = 6/2 X 75000 = 225000
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Mumtaz share = 225000 X 3/6 = 1125000
Ishaq share = 225000 x 2/6 = 75000
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Khurshid share = 225000 x 1/6 = 375000
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Total capital of the firm 225000
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I.Com(2) Accounting PPT Slides by Sir Irfan
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Cell# 0347-3643211
EN
EN
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EN
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Mumtaz, khurshid and Ishaq partnership
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General Journal Entry
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SNO. Particulars P/R Dr Cr
1- Cash 225000
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Capital - Mumtaz 112500
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Capital - Khursheed 37500
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Capital - Ishaq 75000
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VE
EN
EN
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EN
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EN
[ To record investment made by Mumtaz, Khurshid and Ishaq in
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partnership business]
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I.Com(2) Accounting PPT Slides by Sir Irfan
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Cell# 0347-3643211
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2004RP Q#5
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PARTNERSHIP – FORMATION
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GIVEN: On March 01, 2004, Wasim, Asim and Aqib formed a partnership under the name of VIP Brothers and agreed to share
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profit and loss in the ratio of 3:1:2 respectively. This ratio is determined on the basis of capital contribution by each partner. As
per agreement the total capital of the firm shall be Rs.720,000.
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Asim: Contributed cash Rs.50,000 and equipment Rs.70,000.
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Aqib: Contributed furniture worth Rs.180,000 and sufficient cash to make his capital to the ratio of 1:2 of Asim.
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EN
Wasim: Contributed sufficient cash to make his capital to the ratio of 3:1:2 with Asim and Aqib.
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Required:
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(a) Journal entries in the book of VIP Brothers.
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(b) Initial balance sheet as on March 1, 2004.
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EN
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24
ANSWER KEY Asim=120000, Aqib=240000, Wasim=360000 Balance Sheet = Rs.720000
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I.Com(2) Accounting PPT Slides by Sir Irfan
2002P Q#2
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Cell# 0347-3643211
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GIVEN: Mr. Wall Man and Mr. Marshall were carrying on their independent businesses. The financial position on January 1,
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2001 was as under:
Wall Mart Marshall
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Cash Rs.1,500,000 Rs.1,600,000
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Accounts receivable Rs.100,000 Rs.150,000
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EN
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Merchandise inventory Rs.1,000,000 Rs.1,500,000
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Land & building Rs.1,000,000 Rs.2,000,000
Office equipment Rs.200,000 Rs.250,000
Accumulated depreciation (on office equipment) Rs.25,000 Rs.94,000
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Allowance for bad debts Rs.5,000 Rs.6,000
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Accounts payable Rs.170,000 Rs.400,000
EN
Capital, Wall Mart ?
Capital , Marshall ?
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On Jan. 1, 2001, both of them decided to amalgamate their businesses and form a partnership, titled "Marshall Wall Mart". They agreed
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to take their assets and liabilities at their book values in the new partnership firm. They further agreed to make their capitals at par with
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each other i.e. Rs.4,000,000/- each. Shortage to agreed capital, if any, is to be made up by the partner by investing an additional amount
in cash from his personal resources and excess, if any, is to be withdrawn in cash from the business of newly formed firm.
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Required:
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(i) Pass general journal entries in the books of new partnership firm "Marshall Wall Mart” on Jan. 1, 2001.
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EN
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EN
EN
EN
EN
EN
EN
(ii) Prepare an initial balance sheet of new partnership firm on Jan, 1, 2001.
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25
ANSWER KEY Each partner investment Rs.4000000 Balance Sheet = Rs.8570000
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I.Com(2) Accounting PPT Slides by Sir Irfan
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Cell# 0347-3643211
2001RP Q#2(a)
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EN
EN
D
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On March 31, 2001, Naseem and Rasheed decided to form a partnership under the name of "Mehran Traders" by merging
their individual businesses. On that date the agreed valued of each item of balance sheet were as under:-
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Items Naseem Rasheed
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EN
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EN
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Cash 20,000 50,000
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Accounts receivable 40,000 25,000
Merchandise 35,000 60,000
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Building 85,000 ---------
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VE
VE
VE
EN
EN
EN
EN
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EN
EN
EN
EN
Office equipment ---------- 30,000
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Allowance for bad debts 15,000 12,000
EN
Accounts payable 45,000 33,000
Capital 120,000 120,000
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VE
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VE
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VE
EN
EN
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EN
EN
Required:
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(i) Prepare entries in General Journal of the firm to record the formation of partnership.
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(ii) Prepare Initial balance sheet of the firm as on March 31, 2001.
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26
ANSWER KEY Balance Sheet Rs.318000
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I.Com(2) Accounting PPT Slides by Sir Irfan
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Cell# 0347-3643211
1999RP Q#2
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GIVEN Khalid, Altaf and Tariq formed a partnership on April 1, 1999. They contributed as under:
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Khalid contributed Rs.115,000 in the shape of computer and photostate machine Rs.85,000 and furniture Rs.30,000.
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EN
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EN
EN
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EN
EN
EN
Altaf contributed Rs.90,000 in the shape of typewriter Rs.18,000, furniture Rs.10,000, merchandise Rs.20,000 and machinery
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Rs.42,000.
Tariq contributed shop building of Rs,120,000.
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It was further decided that all partners should contribute equally, being equal partners. Khalid and Altaf invested further
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sufficient cash to give them interest equal to that of Tariq.
EN
Required:
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1. Give necessary entries in General Journal of the firm to record the formation of partnership.
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EN
EN
EN
EN
EN
EN
EN
EN
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2. Prepare balance sheet of the firm immediately after the formation.
D
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EN
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27
ANSWER KEY Balance Sheet Rs.360000
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I.Com(2) Accounting PPT Slides by Sir Irfan
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1998RP Q#3 Cell# 0347-3643211
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GIVEN: Karim and Rahim sole traders were doing business separately. On January 1, 1997 their balance sheets showed the following positions:-
Items Karim Rahim
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Cash 15,000 20,000
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VE
VE
VE
VE
VE
VE
VE
VE
Accounts receivable 30,000 40,000
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EN
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EN
EN
EN
EN
EN
EN
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Merchandise inventory 40,000 20,000
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Office equipment 70,000 60,000
Allowance for depreciation – Office equipment 40,000 35,000
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R
VE
VE
VE
VE
VE
VE
VE
VE
VE
Allowance for bad debts 3,000 1,500
EN
EN
EN
EN
EN
EN
EN
EN
EN
Accounts payable 32,000 30,000
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EN
On January 1, 1997 they decided to form a partnership by merging their businesses. All the assets and liabilities were turned over to the new firm on
the following agreed values:-
Karim: Accounts receivable be estimated be realize Rs.26,000. Merchandise inventory to revalued at Rs.42,000. Office equipment be valued at
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Rs.25,000. One-half of the amounts of accounts payable be accepted.
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EN
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EN
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Rahim: Accounts receivable be estimated to realize Rs.39,000. Merchandise inventory be valued at Rs.24,000. Office equipment be valued at
Rs.20,000. One-third of the amounts of accounts payable be accepted.
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Karim and Rahim decided that their capitals in the new partnership will be Rs.120,000 and Rs.100,000 respectively. They contributed the deficiency, if
any, from their private funds.
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Required:
EN
EN
EN
EN
EN
EN
EN
EN
EN
(al Give the necessary entries in the General Journal of the newly formed partnership of Karim and Rahim as on January 1, 1997.
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(b) Prepare a balance sheet of partnership firm as on January 1, 1997 after giving effect to the agreement agreed to by them regarding their28capitals.
ANSWER KEY Balance Sheet Rs.246000
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1997RP Q#3
EN
EN
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EN
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EN
EN
D
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GIVEN:
Jawaid and Junaid are sole traders, were carrying on competing business. On March 1, 1997, they decided to form a partnership
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under the name of “JJ Corporation” by merging their business. On that date their balance sheet items were as follows:-
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VE
VE
VE
VE
Items Jawaid Junaid
EN
EN
EN
EN
EN
EN
EN
EN
EN
D
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Cash 7,000 10,500
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Accounts receivable 35,000 42,000
Merchandise inventory 28,000 17,500
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Office furniture 52,500 42,000
VE
VE
VE
VE
VE
VE
VE
VE
VE
EN
EN
EN
EN
EN
EN
EN
EN
EN
Allowance for depreciation - Office furniture 28,000 14,000
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Allowance for bad debts 4,000 5,000
EN
Accounts payable 24,000 27,000
R
R
VE
VE
VE
VE
VE
VE
VE
VE
VE
The following valuations were agreed upon:-
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EN
EN
EN
EN
EN
EN
EN
EN
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(i) Jawaid's accounts receivable were estimated to realize Rs.30,000 and his office furniture was valued at Rs.40,000.
D
(ii) Junaid's accounts receivable were estimated to realize Rs.38,000 and his office furniture was valued at Rs.9,000.
Required:
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R
VE
VE
VE
VE
VE
VE
VE
VE
VE
EN
EN
EN
EN
EN
EN
EN
EN
EN
(a) Give entries in the General Journal of the firm to record the investment by Jawaid and Junaid.
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29
(b) Prepare initial balance sheet of the firm.
ANSWER KEY Balance Sheet Rs.180000
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I.Com(2) Accounting PPT Slides by Sir Irfan
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Cell# 0347-3643211
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1994RP Q#2
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PARTNERSHIP – FORMATION
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GIVEN: Alim, Badar, and Salim formed a partnership contributing equal amounts of capital shown below:-
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Alim: Cash Rs.15,000 and Office equipment worth Rs.75,000.
Badar: Cash Rs.50,000 and merchandise for the amount of balance.
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Salim: Machinery worth Rs.80,000 and the balance in cash.
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Required:
(a) Prepare entries in General Journal of the firm for the above transactions
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(b) Prepare Initial balance sheet in classified form of the formation of the partnership firm.
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ANSWER KEY Each partner investment Rs.90000 Balance Sheet = Rs.270000
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I.Com(2) Accounting PPT Slides by Sir Irfan
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1991RP Q#2 Cell# 0347-3643211
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Rahim and Saleem were doing separate business. On January 01,1990 they decided to form a partnership by merging their
businesses. On this date their balance sheet items are as under :
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Items Rahim Saleem
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Cash 13,000 8,000
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Accounts receivable 20,000 15,000
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Merchandise inventory 21,000 26,000
Furniture - Cost 20,000 10,000
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Allowance for depreciation –Furniture 5,000 1,000
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Allowance for bad debts 1,000 500
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Accounts payable 8,000 20,000
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They agreed to the following values:-
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Mr. Rahim Accounts receivable be estimated to realize Rs.18,000, Merchandise inventory be valued at Rs.22,000. Furniture be
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valued at Rs.12,000. One half of the accounts payable be accepted.
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Mr. Saleem Accounts receivable be valued at Rs.14,000. Merchandise inventory be valued at Rs.20,000. Furniture be valued at
Rs.5,000. Three-fourth of the amounts of accounts payable be accepted. It was also decided that Saleem will invest sufficient
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cash to give him equal interest with Rahim.
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Required:
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(a) Give entries in General Journal of the new firm to record the investment of Rahim and Saleem.
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(b) Prepare initial Balance Sheet of the firm.
ANSWER KEY Each partner investment Rs.61000 Balance Sheet = Rs.141000
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I.Com(2) Accounting PPT Slides by Sir Irfan
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Cell# 0347-3643211
1990RP Q#2(a)
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Karim and Fahim form partnership and agree as under:-
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1- Karim to contribute cash Rs.30,000 and transfer to the firm title of his office premises, the book value of which was
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Rs.90,000. They mutually agreed to the value of office to be Rs.100,000.
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2- Fahim to contribute cash Rs.35,000 and hand over delivery equipment the book value of which was Rs.25,000. They mutually
agreed to the value of delivery equipment to be Rs.30,000.
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Required:
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Give entries in General Journal of the new firm to record the investment by each partners.
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ANSWER KEY Karim=130000 & Fahim=65000
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(BY SIR IRFAN)
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BOOKLET QUESTION
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Cell# 0347-3643211
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PARTNERSHIP - FORMATION
I.Com(1) Accounting PPT Slides by Sir Irfan
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Required:
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ACCOUNTMICS
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BOOKLET QUESTIONS BY SIR IRFAN
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Prepare general journal entries if Sajid invests Rs. 150,000.
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EN EN EN EN EN
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Abid, Khalid, Sajid and Zahid contributed capital in ratio of 10%, 20%, 30% and 40% respectively.
Cell# 0347-3643211
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EN EN EN EN EN
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I.Com(2) Accounting PPT Slides by Sir Irfan
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I.Com(2) Accounting PPT Slides by Sir Irfan
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Cell# 0347-3643211
ACCOUNTMICS
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BOOKLET QUESTIONS BY SIR IRFAN
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Ayesha and Fatima formed Fatima Store with a capital of Rs.500,000 of which Ayesha is to have 40% interest in the capital and
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Fatima is to have a 60% interest in the capital.
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1) Ayesha brings furniture, which costs Rs.200,000 at an agreed value of Rs.162,500.
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2) Fatima provides equipment that costs Rs.175,000 and has an agreed value of Rs.225,000.
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3) Each partner also invests the necessary cash to comply with the partnership agreement.
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Required:
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EN
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EN
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(i) Prepare journal entries to record the investment of Ayesha and Fatima.
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(ii) Also prepare the initial balance sheet.
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ANSWER KEY Ayesha=200000 Fatima=300000 Balance Sheet=500000
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I.Com(2) Accounting PPT Slides by Sir Irfan
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ACCOUNTMICS Cell# 0347-3643211
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BOOKLET QUESTIONS BY SIR IRFAN
GIVEN: Alia Shahla and Huma formed a partnership on December 1, 2006. They contributed as under:
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Alia contributed Rs.200,000, Rs.80,000 in the shape of equipment, Rs.100,000 for machinery and Rs.20,000 for furniture.
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Shahla contributed Rs.180,000, Rs.80,000 in the shape of merchandise, Rs.60,000 for supplies and Rs.40,000 for furniture.
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Huma invested cash of Rs.220,000.
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It was further decided that all partners should contribute equally, being equal partners. Alia and Shahla invested further sufficient
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cash to give them interest equal to that of Huma.
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Required:
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(1) Give necessary entries in General Journal of the firm to record the formation of partnership.
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(2) Prepare balance sheet of the firm immediately after the formation.
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ANSWER KEY Each partner investment=220000 Balance sheet=660000
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I.Com(2) Accounting PPT Slides by Sir Irfan
VE ACCOUNTMICS
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Cell# 0347-3643211
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BOOKLET QUESTIONS BY SIR IRFAN
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Shakil & Sons and Sohail & Sons were running their business individually. They agreed to form a partnership under the name SS Corner. On
December 31, 2022, their balance sheets were as follows
Shakil & Sons
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Balance Sheet
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As on December 31, 2022
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ASSETS Amount EQUITIES Amount
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Cash 31,200 Accounts payable 98,400
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Accounts Receivable 121,400 Loan payable 160,000
Inventory 210,000 Allow. for depreciation 15,600
Equipment 94,000 Capital 190,000
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Supplies 7,400
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Total 464,000 Total 464,000
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Sohail & Sons
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Balance Sheet
As on December 31, 2022
ASSETS Amount EQUITIES Amount
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Cash 42,000 Accounts payable 75,000
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Accounts Receivable 160,000 Bank overdraft 132,000
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Inventory 258,000 Allow. for depreciation 36,000
Furniture 72,000 Accrued expenses 59,000
D Capital 230,000
Total 532,000 Total 532,000
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The assets and liabilities were taken at the above values in the new partnership. Shakil and Sohail decided their capitals in the new
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partnership will be Rs.220,000 and Rs.250,000 respectively. They contribute the deficiency, if any from their private funds.
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Required: (i) Prepaid journal entries (ii) Prepaid initial Balance Sheet
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I.Com(2) Accounting PPT Slides by Sir Irfan
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Cell# 0347-3643211
ACCOUNTMICS
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BOOKLET QUESTIONS BY SIR IRFAN
On May 1, 2022, Asim, Arif and Almas agreed to form a partnership under the name of A’s Traders, and sharing profit and losses
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in the ratio of 3:1:2. Arif contributed cash Rs.50,000 and furniture costing Rs.70,000 at the agreed value.
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Almas contributed equipment at an agreed value Rs.1,80,000 and sufficient cash to make his capital to that the ratio 1:2 of Arif
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capital.
Asim contributed sufficient cash to make his capital to that of the ratio 3:1:2 of Arif and Almas capitals.
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Required:
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(i) Give necessary entries in the General Journal of the newly formed partnership as on May 1, 2022.
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(ii) Prepare a balance sheet of the new partnership firm as on May 1, 2022.
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I.Com(2) Accounting PPT Slides by Sir Irfan
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Cell# 0347-3643211
ACCOUNTMICS
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BOOKLET QUESTIONS BY SIR IRFAN
Ahsan, Arman and Arfat form a partnership on August 1. They contributed as under:-
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Ahsan contributed Rs.490,000 in the shape of computer and photo state machine of Rs.365,000, supplies Rs.20,000 and
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furniture of Rs.105,000.
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Arman contributed Rs.3,90,000 in the shape of different assets (Equipment Rs.185,000, Furniture Rs.65,000, Merchandise
Rs.130,000 and supplies Rs.10,000)
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Arfat contributed a shop building of Rs.5,10,000.
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It was further decided that all partners should contribute equally being equal partners. Ahsan and Arman invested further
sufficient cash to give him the equal interest of Arfat.
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Required:
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Give Journal Entries & prepare a Balance Sheet as of August 1.
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I.Com(2) Accounting PPT Slides by Sir Irfan
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Cell# 0347-3643211
ACCOUNTMICS
EN
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EN
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BOOKLET QUESTIONS BY SIR IRFAN
Shamim and Tariq agreed to form a partnership firm on February 01, 2022. It is agreed that Shamim will transfer the following
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assets and liabilities of his business to the partnership.
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Cash Rs.28,000, Merchandise inventory Rs.74,000, Equipment Rs.92,000, Accounts Receivable Rs.42,000, Furniture Rs.68,000,
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Supplies Rs.14,000, Accounts Payable Rs.38,000.
It is agreed that doubtful debts are estimated @ 5% of Accounts Receivable and 20% depreciation on Equipment and Furniture.
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Tariq will invest Rs.300,000 in cash and Shamim will make up his capital equal to Tariq by investing sufficient cash.
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Required:
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(i) Give necessary entries in the General Journal of the newly formed partnership as on February 01, 2022.
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EN
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EN
EN
EN
EN
EN
EN
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(ii) Prepare a balance sheet of the new partnership firm as on February 01, 2022.
D
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I.Com(2) Accounting PPT Slides by Sir Irfan
VE ACCOUNTMICS
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Cell# 0347-3643211
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BOOKLET QUESTIONS BY SIR IRFAN
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On January 1 of the current year Rafiq and Aslam form a partnership? Rafiq is to invest certain business assets at valuation to be
agreed upon, is to transfer liabilities to the partnership and is to contribute sufficient cash to bring his total capital to
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Rs.1,50,000.
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Details regarding the book values of his assets and liabilities and the agreed valuations as follows:
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Items Book value Agreed value
Accounts Receivable 45,000 45,000
Allowance for bad debts 2,500 1,750
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Merchandise inventory 80,000 75,000
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Store equipment 20,000 17,500
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Allowance for depreciation (Store equipment) 7,500 --------
Office equipment 24,250 20,000
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Allowance for depreciation (Office equipment) 6,250 --------
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Accounts Payable 31,300 31,300
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Aslam agrees to invest Rs.100,000 cash.
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Required:
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Give entries in the book of new partnership and also prepare a Balance sheet.
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EN
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EN
EN
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EN
EN
EN
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D
41
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VE VE VE VE VE
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Click here
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ONLINE REGISTRATION FORM:
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EN EN EN EN EN
VE VE VE VE VE
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Click here
D D D D D
EN EN EN EN EN
VE VE VE VE VE
R R R R R R
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VE VE VE VE VE
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Click here
VE VE VE VE VE
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HOME AND ONLINE TUITION
REGISTRATION ADMISSION FORM
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EN EN EN EN EN
VE VE VE VE VE
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CONTACT SIR IRFAN VIA WHATSAPP: Banking and Commercial Geography notes
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D D D D D
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