po · IN Ba l/a do

r(mg by Prof· W
nting a nd Re
12 -28 Basic Financial Accou

I NAME:
SECTION:
I SCORE:
PROFESSOR:
j
Problem #1
vestment
Partner's Original In
The
d P28 0, 00 0 ca sh to a partnersh ip .
y, an
n La ba usa co nt rib uted land, inventor 35 0, 0 0 0 . The in ve nt or y ha
s
Froila ket va lu e o f P l,
s a bo ok va lue o f PGS0,000 and a mar 00 . Th e pa rt nersh ip also
land ha value o f P S l0,0
va lue o f P G 00 ,0 00 and a market us ed to purchase the land
.
a book baus a th a t w as
te payable owed by La en t.
assumed a P 350, 000 no
sh eq ui va le nt to La bausa ' s n e t in ve st m
ed to pu t up ca
Rosalie Balhag agre

Required:
the
usa's and B al ha g's in ve st m en t in
Laba
pa re th e jo ur na l entry to record
Pre
partnership.
 Partnerships: Basic Considerations and Formation I 12-29
a~ . E

---NAME:
- SCORE:
SECTION: PROFESSOR:

problem #2
formation of a Partnership

Gogola and Paglinawan have just formed a partnership. Gogola contributed cash of
Pl,260,000 and computer equipment that cost P540,000. The fair value of the computer
is P360,000 . Gogola has notes payable on the computer of P120,000 to be assumed by
the partnership. Gogola is to have 60% capital interest in the partnership. Pagl inawan
contributed only P900,000. The partners agreed to share profit and loss equally.

Gogola should make an additional investment or (withdrawal) of _ _ __

 12 -30 I 8 ..,, ,. 1c:1 /a l
o.. c nanr: A<.~comf'ino and l<
, ar ' zrr1tt eportlny t;y l'rof. WIN Bolf
sn ..1 , c vs,, ,o ror 11ado z n
ttttne· t ·e r e :rsn ttt , e r , r n r • u T a ~,a zPtrn z e ~-

I NAME:
SECTION:
I~SCORE:
PROFESSO R: j
Problem #3
A Sole Proprietor and an Individual with No Business Form a Partnership

Es panol operated a specia lty shop that sold fl t;h lng equipmen t and accessories . Her
post ◄clo5lng tria l balance on Dec. 31, 2018 is as follow s:

Fish
Post -Closing Tria l Balance
Dec. 31, 201.8

Debit Credit
Cash P 36,000
Accounts Receiva ble 150,000
Allowance for Uncollectibl e Accounts P 16,000
Inventory 440,000
Equipment 135,000
Accumu lat ed Depreciation 75,000
Accounts Payable 30,000
Es panol, Capital 640,000
P761,000 P761,000

Espanol plans to enter into a partn ership with trusted associate, Selisana, effective Jan.
1, 2019 . Profits or losses will be shared equally. Espanol is to transfer all assets and
liabilities of her shop to the partnership after revaluation.

Selisa na will invest cash equal to Espanol's investment after revaluation. The agreed
va lues are as follows : accounts receivable (net), Pl40,000; inventory, P460,000; and
equipmen t (net), Pl24,000. The partnership will operate under the business name of
Fish R' Us,

Required :
1. Prepare the opening journal entries in the books of the partnership.

2. Prepare th e partnershi p' s statement of financial position as at the date of formation

of the partners hip.
 n 12-31
iderations an d Fo r_m at io
Partnerships : Basic Cons

ijcr,oN:
~ME:
I SCORE:
~ROFESSOR:

problem #4 ship
an In di vidu al wi th No Business Form a Partner
ASole Proprietor and
re ta il busin es s an d Ta n, decided to fo rm a
2 o wh o has her own
On Apr. 8, 019, To le nt in in th e ra tio of 40 :60, respectively. The
wi ll divide pr of its
partnership wh er ei n th ey follows:
sit io n of Tolentino is as
statement of financial po
To len tin o Ma rk et ing
Position
St at em en t of Financial
April 8, 2019

Assets
p 4,0 00
Cash
Accounts Receivable P160,000
co lle cti ble Accounts 16,000 14 4,0 00
Less: Al low an ce fo r Un
In ve nt or y 20 0,0 00
Eq uip me nt P 50,000
pr ec iat ion 10,000 40 ,00 0
Less: Ac cu mu lat ed De
P388,000
To tal Assets

Liabilities and Capital

Ac co un ts Payable
p 36,000
352,000
To len tin o, Ca pit al
pital P388,000
To tal Lia bil itie s an d Ca

ership:
ag re ed up on be fo re th e fo rm at io n of the partn
Conditions
ble.
bl e of To le nt in o is es timated to be 70% realiza
a. The accounts receiva ui pm en t wi ll be increased by Pl 0, 00 0.
preciation of th e eq
b. The accumulated de ip.
ts pa ya bl e wi ll b_e assumed by the partnersh
c. The ac co un
d on th e ad jus te d capital balance of Tolentino.
rtners-hip is base
d. The capital of th e pa to m ak e th e partner's capital balan
ces
cash in or de r
Tan is to co nt rib ut e
of it and loss ratio.
pr op or tio na te to th e pr

Required:
ar y jo ur na l en tri es in th e books of Tolentino.
1. Prepare th e necess
ership.
en in g jo ur na l en tri es in the books of the partn
2. Prepare th e op
 . orting by prof. WIN Bal/ado
12-32 I Basic Financial Accountmg and Rep

SCORE:
NAME: PROFESSOR:
SECTION:

Problem #5
Two Sole Proprietors Form a Partnership

Medina and Dalangin are fierce competitors who sell hunting equipment. They finally
decided to join forces in order to increase their business and reduce costs. An
agreement is reached between the two to begin operations as a partnership on Mar. 1
2019. '

Medina and Dalangin have decided to share profits or losses in the ratio of 60:40
respectively. '

The statements of financial position of Medina and Dalangin as at Mar. 1, 2019 are
follows: as

Medina Dalangin

Cash p 42,000 P 30,000

Accounts Receivable 389,200 169,200
Allowance for Uncollectible Accounts {22,400) (14,400)
Merchandise Inventory 461,600 300,800
Prepaid Rent 6,000
Office Supplies 30,400 4,000
Land 40,000
Building 128,000
Accumulated Depreciation {32,000)
Office Equipment 24,000 62,000
Accumulated Depreciation {6,000) {13,200)
Repair Equipment 172,000
Accumulated Depreciation {68,000)
Tota I Assets Pl,158,800 PS44,400

Notes Payable P 120,000

Accounts Payable 170,000 Plll,600
Mortgage Payable 200,000
Medina, Capital 668,800
Dalangin, Capital
432,800
Total Liabilities and Owners' Equity Pl,158,800 P544,400
 Partnerships: Basic Considerations and Form ation I 12-33

Hunting Gears. The partners

The name ofth e part ners hip wifl be Med ina and Dalangin
have agreed to effe ct the follo wing adjustments:
. The inve ntor y of
a. Medina's merchandise inve ntor y is to be reduced by Pl0S ,200
oalangin will be increased by P7,200.
ts:
b. The follo wing are the fair mark et values of the various asse
Medina Dalangin

Land P108,000
Building 192,000
Office Equi pme nt 16,000 P40,000
Repair Equi pme nt 124,000

s. All othe r liabilities

c. One-half of the notes payable of Medina are personal note
of the part ners are assumed by the partnership.

d by the partnership.
d. The prepaid rent in the books of Dalangin will be consume

Required: ·
partnership.
Prepare the jour nal entries to record the formation of the