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Requirement B

The document provides journal entries to record initial capital contributions to a partnership from two partners, Mr. Sun and Ms. Moon. It then shows adjusting entries made by the partners to equalize their capital account balances.

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Alyanna Alcantara
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21 views

Requirement B

The document provides journal entries to record initial capital contributions to a partnership from two partners, Mr. Sun and Ms. Moon. It then shows adjusting entries made by the partners to equalize their capital account balances.

Uploaded by

Alyanna Alcantara
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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❖ Requirement B: Provide the simple journal entries to record the partner’s contributions.

Cash 400,000

Accounts receivable 200,000

Mr. Sun, Capital 600,000

(To record the contributions of Mr. Sun)

Land 1,000,000
Equipment 150,000
Mortgage payable 250,000
Ms. Moon, Capital 900,000
(To record the contributions of Ms. Moon)
Ms. Moon, Capital 150,000
Mr. Sun, Capital 150,000
(To equalize the capital balances of the partners).
 Use the information in problem ‘1’’. However, assume that the partners agreed to have
their capital accounts initially credited at equal amounts. A partner shall provide
additional investment (or withdrawal part of his investment) in order to equalize the
balance of the partners' capital accounts.
 Mr. Sun Ms. Moon Partnership
 Cash 400,000 400,000
 Accounts Receivable 200,000 200,000
 Land 1,000,000 1,000,000

Equipment 150,000 150,000


Total 600,000 1,150,000 1,750,000

Mortgage payable – land -250,000 -250,000

Adjusted capital balances 600,000 900,000 1,500,000

❖ Requirement: Which partner shall make an additional investment and which partner shall
withdraw part of his/her investment?

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