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    Partnership Exercise 2

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    nik
    The document describes three entrepreneurs - Marilou Malquisto, Ma. Fretcyl Beringuel, and Mark Anthony Alemanza - who wanted to form a partnership. It provides their initial capital contributions and agreed adjustments, including standardizing cash contributions to ₱1,000,000, updating equipment values, and accounting for inventory obsolescence and accounts receivable collectability. The adjustments are then applied through journal entries to each partner's capital account.

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    Partnership Exercise 2

    Uploaded by

    nik
    654 views5 pages
    The document describes three entrepreneurs - Marilou Malquisto, Ma. Fretcyl Beringuel, and Mark Anthony Alemanza - who wanted to form a partnership. It provides their initial capital contributions and agreed adjustments, including standardizing cash contributions to ₱1,000,000, updating equipment values, and accounting for inventory obsolescence and accounts receivable collectability. The adjustments are then applied through journal entries to each partner's capital account.

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    The document describes three entrepreneurs - Marilou Malquisto, Ma. Fretcyl Beringuel, and Mark Anthony Alemanza - who wanted to form a partnership. It provides their initial capital contributions and agreed adjustments, including standardizing cash contributions to ₱1,000,000, updating equipment values, and accounting for inventory obsolescence and accounts receivable collectability. The adjustments are then applied through journal entries to each partner's capital account.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    654 views5 pages

    Partnership Exercise 2

    Uploaded by

    nik
    The document describes three entrepreneurs - Marilou Malquisto, Ma. Fretcyl Beringuel, and Mark Anthony Alemanza - who wanted to form a partnership. It provides their initial capital contributions and agreed adjustments, including standardizing cash contributions to ₱1,000,000, updating equipment values, and accounting for inventory obsolescence and accounts receivable collectability. The adjustments are then applied through journal entries to each partner's capital account.

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    © All Rights Reserved
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    Marilou Malquisto, Ma.

    Fretcyl Beringuel and Mark Anthony Alemanza were all successful


    entrepreneurs. They believed that once pulled their resources together and with their combined expertise and
    managerial skills, they can surely beat the existing competitors in the locality. Their respective post-losing
    trial balance are presented below:

    Malquisto Beringuel Alemanza


    Cash ₱ 950,000 ₱ 850,000 ₱ 750,000
    Accounts Receivable 70,000 90,000 25,000
    Estimated (3,000) (5,000) (2,000)
    Uncollectible Account
    Merchandise Inventory 420,000 600,000 450,000
    Equipment 350,000 480,000 250,000
    Accumulated (180,000) (230,000) (175,000)
    Depreciation
    Capital ₱ 1,607,000 ₱ 1,785,000 ₱ 1,298,000

    They agreed to comply with the following adjustments:


    ▪ Accounts receivable should have the following probability of collection: Malquisto 90%,
    Beringuel 95%, Alemanza 98%
    ▪ Merchandise should be valued at 90% of the book value for obsolence
    ▪ Equipment should have carrying value as follows:
    Malquisto P165,000, Beringuel P150,000 Alemanza P180,000
    ▪ Each of the prospective partner should level off the cash contribution to P1,000,000.

    M. Malquisto

    Uncollectible Accounts

    Accounts Receivable ₱ 70,000


    90%
    Required Allowance 63,000
    Per Books 3,000
    Adjustments ₱ 60,000

    M. Malquisto, Capital ₱ 60,000


    Estimated Uncollectible Accounts ₱ 60,000
    Inventory

    FMV of Inventory ₱ 420,000


    Book Value 378,000
    Decrease in Value for Inventory ₱ 42,000

    M. Malquisto, Capital ₱ 42,000


    Merchandise Inventory ₱ 42,000

    Accumulated Depreciation

    Equipment
    FMV ₱ 350,000
    Book Value 165,000
    Adjustment ₱ 185,000

    Accumulated Depreciation ₱ 185,000


    M. Malquisto, Capital ₱ 185,000

    Closing Entries

    Estimated Uncollectible Accounts ₱ 63,000


    Accumulated Depreciation 5,000
    M. Malquisto, Capital 1,690,000
    Cash in Bank ₱ 950,000
    Accounts Receivable 70,000
    Merchandise Inventory 378,000
    Equipment 350,000
    M. Beringuel

    Uncollectible Accounts

    Accounts Receivable ₱ 90,000


    95%
    Required Allowance 85,500
    Per Books 5,000
    Adjustments ₱ 80,000

    M. Beringuel, Capital ₱ 80,000


    Estimated Uncollectible Accounts ₱ 80,000

    Inventory

    FMV of Inventory ₱ 600,000


    Book Value 540,000
    Decrease in Value for Inventory ₱ 60,000

    M. Beringuel, Capital ₱ 60,000


    Merchandise Inventory ₱ 60,000

    Accumulated Depreciation

    Equipment
    FMV ₱ 480,000
    Book Value 150,000
    Adjustment ₱ 330,000

    Accumulated Depreciation ₱ 330,000


    M. Beringuel, Capital ₱ 330,000
    Closing Entries

    Estimated Uncollectible Accounts ₱ 85,000


    Accumulated Depreciation 560,000
    M. Beringuel, Capital 1,975,000
    Cash in Bank ₱ 850,000
    Accounts Receivable 90,000
    Merchandise Inventory 660,000
    Equipment 480,000

    M. Alemanza

    Uncollectible Accounts

    Accounts Receivable ₱ 25,000


    98%
    Required Allowance 24,500
    Per Books 2,000
    Adjustments ₱ 22,500

    M. Alemanza, Capital ₱ 22,500


    Estimated Uncollectible Accounts ₱ 22,500

    Inventory

    FMV of Inventory ₱ 450,000


    Book Value 405,000
    Decrease in Value for Inventory ₱ 45,000

    M. Beringuel, Capital ₱ 45,000


    Merchandise Inventory ₱ 45,000
    Accumulated Depreciation

    Equipment
    FMV ₱ 250,000
    Book Value 180,000
    Adjustment ₱ 70,000

    Accumulated Depreciation ₱ 70,000


    M. Beringuel, Capital ₱ 70,000

    Closing Entries

    Estimated Uncollectible Accounts ₱ 24,500


    Accumulated Depreciation 105,000
    M. Alemanza, Capital 1,300,500
    Cash in Bank ₱ 750,000
    Accounts Receivable 25,000
    Merchandise Inventory 495,000
    Equipment 250,000

    Sorry sir hindi ko po talaga mabalance.

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