P 2-1 (Cash and Net Assets Contributions)
P 2-1 (Cash and Net Assets Contributions)
P 2-1 (Cash and Net Assets Contributions)
BSMA
1-7
Acosta Company
December 1, 2021
ASSETS
Cash P 600,000
Aguas offers to invest cash to give him an equity credit equal to one-half of the equity of Acosta after
adjustments for the items below. Acosta accepted the offer.
1. The merchandise is to be valued at P650,000.
2. The Allowance for Uncollectible Accounts is P225,000.
3. Interest accrued on Notes Receivable should be reflected. The note is dated September 30, 2014 and
bears interest at 6%.
4. Interest accrued on Notes Payable for the period September 1 to December 1, 2021 should be
recognized. The interest rate on the note is 10%.
5. The furniture and equipment are one third depreciated.
6. Office supplies on hand, which have been charged to expenses, amounted to P15,000. These
supplies will be used by the new partnership.
Instructions:
1. Prepare the journal entries on the books of Acosta to give effect to the partnership formation.
2. Prepare the Statement of Financial Position for the new partnership
1. Journal entries
Merchandise Inventory P 50,000
Cash P 2,525,000
Cash P 1,262,500
December 1, 2021
ASSETS
Cash 1,862,500
Partners Abada and Albano agreed to combine their businesses into a partnership. The
Statement of Financial Position accounts of Abada and Albano are shown below:
ABADA ALBANO
Accounts
Instructions:
Give the journal entries to record the partnership formation under each of the following
independent assumptions:
Cash 50,000
Equipment 120,000
Cash P 70,000
Equipment 70,000
Cash P 70,000
Equipment 70,000