2-1

Cash 20,000
Accounts Receivable 4,000
Land 400,000
Accounts Payable 16,000
James, Capital 408,000
To record the investment of James in the partnership.

2-2 Journal entry to record investment of Jake Gonzales.

Cash 800,000
Accounts Receivable 430,000
Merchandise Inventory 140,000
Office Equipment 600,000
Allowance for Uncollectible Accounts 50,000
Gonzales, Capital 1,920,000
To record the investment of Jake Gonzales in the new partnership.

2-3
Assumption 1: Partnership will use the books of Jack
Adjustments in Jack’s Book
a. Andre, Capital 5,500
Merchandise Inventory 5,500
b. Andre, Capital 20,000
Allowance for Uncollectible Accounts 20,000
c. Andre, Capital 2,000
Other Assets 2,000
 Jack, Capital
Dr. Cr.
a. 5,500 641,976
b. 20,000
c. 2,000 Bal. 614,476

Step 2: To record the investment of Jill.

Cash 22,354
Accounts Receivable 567,890
Inventories 253,402
Building 428,267
Furniture & Fixtures 34,789
Accounts Payable 243,650
Notes Payable 345,000
Allowance for Uncollectible Accounts 35,000
Andy, Capital 683,052

To close the books of Jill:

Accounts Payable 243,650
Notes Payable 345,000
Allowance for Uncollectible Accounts 35,000
Andy, Capital 683,052
Cash 22,354
Accounts Receivable 567,890
Inventories 253,402
Building 428,267
Furniture & Fixtures 34,789
2. Assumption: New set of books will be used by the partnership
Cash 11,000
Accounts Receivable 234,536
Inventories 114,535
Land 603,000
Furniture & Fixtures 50,345
Accounts Payable 178,940
Allowance for Uncollectible Accounts 20,000
Notes Payable 200,000
Andre, Capital 614,476
To record the investment of Jack.

Cash 22,354
Accounts Receivable 567,890
Inventories 253,402
Building 428,267
Furniture & Fixtures 34,789
Accounts Payable 243,650
Notes Payable 345,000
Allowance for Uncollectible Accounts 35,000
Andy, Capital 683,052
To record the investment of Jill.
 JACK AND JILL
STATEMENT OF FINANCIAL POSITION
MAY 01, 2020

ASSETS LIABILITIES AND CAPITAL

Cash P 33,354 Accounts Payable P 422,590

Accounts Receivable P 802,426 Notes Payable 545,000

Less: Allowance for Uncollectible Accounts 55,000 747,426

Merchandise Inventory 367,937

Building 428,267

Land 603,000 Andre, Capital 614,476

Furnitures and Fixtures 85,134 Andy, Capital 683,052

Total Assets P 2,265,118 Total Liabilities and Capital P 2,265,118

2-4
Accounts Receivable 195,000
Merchandise Inventory 26,250
Equipment, net 20,000
Allowance for Bad Debts 12,500
Accounts Payable 75,000
Capital, Jhong 153,750
To record the investment of Jhong.

1. The amount of cash Jhong should invest upon the formation of the partnership is Php
96,250. (250,000-153,750)

2. Assumption 2: Partnership will use new set of books.

Cash 110,000
Inventories 140,000
Capital, Jhing 250,000
To record the investment of Jhing.

Cash 96,250
Accounts Receivable 195,000
Merchandise Inventory 26,250
Equipment, net 20,000
Allowance for Bad Debts 12,500
Accounts Payable 75,000
Capital, Jhong 250,000
To record the investment of Jhong.

2-5
Prepaid Expenses 10,000
Capital, Jojo 10,000

Capital, Jojo 6,000

Accrued Expenses 6,000

Capital, Jojo 10,000

Accumulated Depreciation 10,000

Jojo’s Capital
 P 10,000 P 405,000
6,000
10,000
P 399,000

1. Jojo’s adjusted capital balance is Php 399,000.

2. Jam should invest P 266,000 to give him a 40% equity in the firm.

Required total partnership capital using adjusted Carl, Capital

As the base: (399,000/60%) 665,000
Jam share is 40% (P665,000x40%) 266,000
2-6
Merchandise Inventory 1,400,000
Building 2,450,000
Machinery and Equipment 1,400,000
Furniture and Fixtures 300,000
Mortgage Payable 1,300,000
Karl, Capital 1,250,000
Kent, Capital 3,000,000

1. The adjusted capital of each partner on June 1, 2020 are:

Karl, Capital 1,250,000
Kent, Capital 3,000,000

2. The cash to be invested by Karl is Php 750,000.

Required total partnership capital using Kent’s, Capital
As the base: (3,000,000/60%) 5,000,000
Karl’s share is 40% (P5,000,000x40%) 2,000,000
(2,000,000-1,250,000 = 750,000)
2-7
Cash 400,000
Merchandise Inventory 500,000
Land 1,150,000
Building 750,000
Equipment 650,000
Mortgage Payable 350,000
Jolo, Capital 1,050,000
Joko, Capital 2,050,000
1. The cash Joko must invest to receive a capital credit equal to his profit and loss ratio is
Php 400,000
Required total Partnership Capital using Jolo’s capital as the base:
(1,050,000/30%) 3,500,000
Joko’s share is 70% 2,450,000
2. The total capital of the partnership is Php 3,700,000
3. The total assets of the partnership is Php 4,050,000
2-8
Accounts Receivable, net 40,000
Merchandise Inventory 240,000
Property and Equipment, net 320,000
Accounts Payable 280,000
Jerry, Capital 320,000
To record the investment of Jerry.

Accounts Receivable, net 90,000

Merchandise Inventory 150,000
Accounts Payable 40,000
Jason, Capital 200,000
To record the investment of Jason.

Jerry invested Php 30,000 cash, while Jason invested Php 150,000 cash.
 1. The capital of Jason after giving effect to the above adjustments but before the cash
withdrawal was Php 200,000.
2. The capital of Jerry after giving effect to the above adjustments but before the cash
investment was Php 320,000.
3. The cash investment of Jerry is Php 30,000.
4. The cash investment of Jason is Php 150,000.
5. The total current assets of the partnership immediately after its formation is Php 700,000.
6. The total assets of the partnership immediately after its formation is Php 1,020,,000.

2-8
Initial cost Php 2,000,000
MV when John inherited it 3 years ago: Php 3,000,000
Current MV: Php 5,000,000