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Problem 1-1

1. Pedro Castro and Jose Bunag formed a partnership, with Pedro contributing assets of P30,135 and Jose contributing P15,067.50. 2. The partnership adjusted the assets and liabilities that Pedro contributed, including recognizing accumulated depreciation on furniture and fixtures of P1,400. 3. A balance sheet for the new Castro and Bunag Partnership was presented, with total assets of P59,302.50 and total liabilities and capital also of P59,302.50.

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185 views

Problem 1-1

1. Pedro Castro and Jose Bunag formed a partnership, with Pedro contributing assets of P30,135 and Jose contributing P15,067.50. 2. The partnership adjusted the assets and liabilities that Pedro contributed, including recognizing accumulated depreciation on furniture and fixtures of P1,400. 3. A balance sheet for the new Castro and Bunag Partnership was presented, with total assets of P59,302.50 and total liabilities and capital also of P59,302.50.

Uploaded by

wivada
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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1. a.

Books of Pedro Castro will be retained by the partnership

To adjust the assets and liabilities of Pedro Castro.

1. Pedro Castro, Capital............................................................ 600


Merchandise Inventory..................................................... 600

2. Pedro Castro, Capital............................................................ 200


Allowance for Bad Debts................................................. 200

3. Accrued Interest Receivable................................................. 35


Pedro Castro, Capital........................................................ 35

Computation:
P1,000 x 6% x 3/12 = P15
P2,000 x 6% x 2/12 = _20
Total................................P35

4. Pedro Castro, Capital............................................................ 100


Accrued Interest Payable.................................................. 100
(P4,000 x 5% x 6/12 = P100)

5. Pedro Castro, Capital............................................................ 800


Accumulated Depreciation – Furniture and Fixtures........ 800

6. Office Supplies..................................................................... 400


Pedro Castro, Capital........................................................ 400

To record the investment of Jose Bunag.

Cash. ........................................................................................... 15,067.50


Jose Bunag, Capital.............................................................. 15,067.50

Computation:
Pedro Castro, Capital
(1) P600 P31,400
(2) 200 35 (3)
(4) 100 400 (6)
(5) ___800
P1,700 P31,835
P30,135
Jose Bunag, Capital : 1/2 x P30,135 = P15,067.50

b. A new set of books will be used

Books of Pedro Castro

To adjust the assets and liabilities.


See Requirement (a).

To close the books.

Notes Payable.............................................................................. 4,000


Accounts Payable........................................................................ 10,000
Accrued Interest Payable............................................................. 100
Allowance for Bad Debts............................................................ 1,200
Accumulated Depreciation – Furniture and Fixtures................... 1,400
Pedro Castro, Capital................................................................... 30,135
Cash...................................................................................... 6,000
Notes Receivable.................................................................. 3,000
Accounts Receivable............................................................. 24,000
Accrued Interest Receivable................................................. 35
Merchandise Inventory......................................................... 7,400
Office Supplies..................................................................... 400
Furniture and Fixtures........................................................... 6,000

New Partnership Books

To record the investment of Pedro Castro.

Cash .......................................................................................... 6,000


Notes Receivable......................................................................... 3,000
Accounts Receivable................................................................... 24,000
Accrued Interest Receivable........................................................ 35
Merchandise Inventory................................................................ 7,400
Office Supplies............................................................................ 400
Furniture and Fixtures................................................................. 6,000
Notes Payable....................................................................... 4,000
Accounts Payable.................................................................. 10,000
Accrued Interest Payable...................................................... 100
Allowance for Bad Debts...................................................... 1,200
Accumulated Depreciation – Furniture and Fixtures............. 1,400
Pedro Castro, Capital............................................................ 30,135

To record the investment of Jose Bunag.

Cash. ........................................................................................... 15,067.50


Jose Bunag, Capital.............................................................. 15,067.50
2. Castro and Bunag Partnership
Balance Sheet
October 1, 2008
Assets

Cash .......................................................................................................... P21,067.50


Notes receivable......................................................................................... 3,000.00
Accounts receivable................................................................................... P 24,000
Less Allowance for bad debts..................................................................... ___1,200 22,800.00
Accrued interest receivable........................................................................ 35.00
Merchandise inventory............................................................................... 7,400.00
Office supplies .......................................................................................... 400.00
Furniture and fixtures................................................................................. 6,000
Less Accumulated depreciation.................................................................. ___1,400 __4,600.00
Total Assets....................................................................................... P59,302.50

Liabilities and Capital

Notes payable .......................................................................................... P 4,000.00


Accounts payable....................................................................................... 10,000.00
Accrued interest payable............................................................................ 100.00
Pedro Castro, Capital.................................................................................. 30,135.00
Jose Bunag, Capital.................................................................................... _15,067.50
Total Liabilities and Capital.............................................................. P59,302.50

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