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    7 Lec 03 - Partnership Formation With One With Bu

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    Nathalie Getino
    Here are the journal entries to record the partnership formation: 1. Debit Inventory 150,000 Credit Inventory 180,000 To adjust inventory to 150,000 2. Debit Allowance for Doubtful Accounts 30,000 Credit Accounts Receivable 30,000 To adjust allowance to reflect 10% uncollectible 3. Debit Interest Expense 12,000 Credit Notes Payable 12,000 To record interest expense on notes 4. Debit Land 200,000 Credit Land 100,000 To adjust land to appraised value of 500,000 5. Debit Building 60,000 Credit Building 60,000 To adjust building to appraised value of

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    7 Lec 03 - Partnership Formation With One With Bu

    Uploaded by

    Nathalie Getino
    69 views2 pages
    Here are the journal entries to record the partnership formation: 1. Debit Inventory 150,000 Credit Inventory 180,000 To adjust inventory to 150,000 2. Debit Allowance for Doubtful Accounts 30,000 Credit Accounts Receivable 30,000 To adjust allowance to reflect 10% uncollectible 3. Debit Interest Expense 12,000 Credit Notes Payable 12,000 To record interest expense on notes 4. Debit Land 200,000 Credit Land 100,000 To adjust land to appraised value of 500,000 5. Debit Building 60,000 Credit Building 60,000 To adjust building to appraised value of

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    Here are the journal entries to record the partnership formation: 1. Debit Inventory 150,000 Credit Inventory 180,000 To adjust inventory to 150,000 2. Debit Allowance for Doubtful Accounts 30,000 Credit Accounts Receivable 30,000 To adjust allowance to reflect 10% uncollectible 3. Debit Interest Expense 12,000 Credit Notes Payable 12,000 To record interest expense on notes 4. Debit Land 200,000 Credit Land 100,000 To adjust land to appraised value of 500,000 5. Debit Building 60,000 Credit Building 60,000 To adjust building to appraised value of

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    69 views2 pages

    7 Lec 03 - Partnership Formation With One With Bu

    Uploaded by

    Nathalie Getino
    Here are the journal entries to record the partnership formation: 1. Debit Inventory 150,000 Credit Inventory 180,000 To adjust inventory to 150,000 2. Debit Allowance for Doubtful Accounts 30,000 Credit Accounts Receivable 30,000 To adjust allowance to reflect 10% uncollectible 3. Debit Interest Expense 12,000 Credit Notes Payable 12,000 To record interest expense on notes 4. Debit Land 200,000 Credit Land 100,000 To adjust land to appraised value of 500,000 5. Debit Building 60,000 Credit Building 60,000 To adjust building to appraised value of

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    of 2

    Sir Win – Accounting Lectures

    ✓ Jokes ✓ Tagalog
    ✓ Stories ✓ Legit Professor
    ✓ Life Lessons

    --------------------------------------------------------------------------------------------------------------
    Lecture 03: Partnership Formation
    (A sole proprietor and another individual form a partnership)
    --------------------------------------------------------------------------------------------------------------

    The statement of financial position of Veronica Jara on


    March 1, 2021 before accepting Russeth Quezon as partner
    is shown as follows:

    Veronica Jara Shoes


    Statement of Financial Position
    March 1, 2021

    Cash 150,000
    Accounts Receivable 280,000
    Less: Allowance for bad debts (50,000) 230,000
    Inventory 180,000
    Land 300,000
    Building 600,000
    Less: Accum. Depr. – Building (60,000) 540,000
    Total Assets 1,400,000

    Accounts Payable 250,000


    Notes Payable 140,000
    Jara, Capital 1,010,000
    Total Liabilities and Owner’s Equity 1,400,000
    Sir Win – Accounting Lectures
    ✓ Jokes ✓ Tagalog
    ✓ Stories ✓ Legit Professor
    ✓ Life Lessons

    Russeth Quezon offered to invest cash to get a capital credit


    equal to one-half of Veronica Jara capital after giving effect
    to the adjustments as follows:

    a. The inventory is to be valued at 150,000


    b. The accounts receivable is estimated to be 90%
    collectible
    c. Interest on notes payable will be recognized. The note is
    dated January 1, 2021 with 12% annual interest.
    d. Land will be revalued at 500,000
    e. Building is to be valued at 480,000
    f. Office supplies on hand that have been charged to
    expense in the past amounted to 15,000. These will be
    used by the partnership.

    Required:
    1. Journal entries to record the partnership formation
    2. Statement of financial position after partnership
    formation.

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