Andy and Amy agree to form a partnership with Amy investing the following:

Cost Market Value

Land 1,500,000.00 3,500,000.00
Building 5,000,000.00 2,500,000.00
Accumelated Depreciation - 1,500,000.00

Land 3,500,000.00
Building 2,500,000.00
Cash 3,000,000.00
Amy, Capital 6,000,000.00
Andy, Capital 3,000,000.00
e following:
 On January 1,2019, Elmer and Edam formed a partnership with Elmer contributing P900,000 cash and Edam
contributing land valued at P300,000 and a building valued at P500,000. The partnership will assume Edam’s
P200,000 long-term note payable associated with the land and building. The partners agree to share income on a
3:2 basis, respectively. Before the year ended, Elmer and Edam withdrew cash of P30,000 and P25,000, respectively.
At the end of the year, total revenues amounted to P375,000 and total operating expenses amounted to P125,000.

Answer: Direction A Direction B

January 1,2019 Cash 900,000.00
Land 300,000.00 Elmer and Edam Partnership
Building 500,000.00 Statement of Partner's Equity
Notes Payable 200,000.00 For the year ended December 31, 2019
Elmer, Capital 900,000.00 Elmer Edam Total
Edam, Capital 600,000.00 Capital, January 1 900,000.00 600,000.00 1,500,000.00
To record the initial investment of Elmer and Edam Net Income 150,000.00 100,000.00 250,000.00
Less: Drawings 30,000.00 25,000.00 55,000.00
Dec. 31,2019 Elmer, Drawing 30,000.00 Capital, December 31 1,020,000.00 675,000.00 1,695,000.00
Edam, Drawing 25,000.00
Cash 55,000.00

To record the personal withdrawals of Elmer and Edam

Income & Expense Summary 250,000.00

Elmer, Capital 150,000.00
Edam, Capital 100,000.00
To record the profit shares of Elmer and Edam
 Clara and Eba agree to form a partnership on July 1 with Eba contributing the following items coming from her sole-
proprietor-owned music store:

Merchandise Inventory
Equipment – cost – costbook
P500,000; of P120,000; current fair
value of P450,000, value fair
current of P100,000
value of
P400,000.
6% one-year note issued for the equipment on May 1 for P150,000, will assumed by the firm.

Clara agreed to contribute furniture and fixtures which was purchased two years ago for P500,000 less accumulated
depreciation of P200,000. Current market value is 80% of book value. The partners further agreed that the contribution of
Eba be 50% of total equity and Clara should still invest cash to make her equity also equal to 50%.

Answer:
Jul-01 Merchandise Inventory 100,000.00
Equipment 400,000.00
Notes Payable 150,000.00
Eba, Capital 350,000.00
To record the initial investment of Eba

Cash 10,000.00
Furniture & Fixtures 340,000.00
Clara, Capital 340,000.00
To record the initial investment of Clara
Direction A:
Reyes, Ortiz, and Flores Best Pizza
Statement of Financial Position
As of May 31, 2019
Assets Reyes Ortiz Flores
Cash 80,000.00 40,000.00 -
Merchandise 70,000.00 - -
Accounts Receivable 50,000.00 - -
Allowance for Doubtful Accounts 10,000.00 - -
Furniture - 75,000.00 -
Cooking Equipment - 210,000.00

Liabilities & Partner's Equity

Notes Payable - 75,000.00
Capital 190,000.00 115,000.00 135,000.00
Additional Cash Investments - 75,000.00 55,000.00
Partner's Capital 190,000.00 190,000.00 190,000.00

Direction B: Ortiz should make additional cash investment of 75,000

Flores should make additional cash investment of 55,000
Thus, the total additional investment will be 130,000
 Direction C:

May-01 Cash 80,000.00

Total Merchandise 70,000.00
120,000.00 Accounts Receivable 50,000.00
70,000.00 Allowance for Doubtful Accounts
50,000.00 Reyes, Capital
10,000.00 To record the investment of Reyes
75,000.00
210,000.00 Cash 40,000.00
Furniture 75,000.00
Ortiz, Capital
75,000.00 To record the investment of Ortiz
440,000.00
130,000.00 1 Cooking Equipment 210,000.00
570,000.00 Notes Payable
Flores, Capital
nvestment of 75,000 To record the investment of Flores
investment of 55,000
ent will be 130,000 31 Cash 130,000.00
Ortiz, Capital
Flores, Capital
 10,000.00
190,000.00

115,000.00

75,000.00
135,000.00

75,000.00
55,000.00
 Direction A: Adjusting Entries
Taverna, Capital 8,000.00
Allowance for bad Debts
To record the adjustment in allowance for bad debts

Taverna, Capital 12,000.00

Merchandise Inventory
To record the adjustment in merchandise inventory

Taverna, Capital 4,500.00

Allowance for Depreciation - Furniture & Equipment

Closing Entries
Allowance for bad Debts 10,000.00
Allowance for Depreciation - Furniture & Equipment 22,500.00
Accounts Payable 40,000.00
Taverna, Capital 225,500.00
Cash
Accounts Receivables
Merchandise Inventory
Furniture & Equipment

Direction C: Open Books

Cash 137,000.00
Accounts Receivable 80,000.00
Merchandise Inventory 108,000.00
Furniture & Equipment 67,500.00
Allowance for Bad Debts
Accounts Payable
Taverna, Capital
Elchico, Capital
Baylon, Capital
To open the books of partnership
 Direction B: Cash Investment
Taverna Elchico
8,000.00 Cash 68,500.00
Accounts Receivable 80,000.00
Allowance for Bad Debts 10,000.00
Merchandise Inventory 108,000.00
12,000.00 Furniture & Equipment 90,000.00
Allowance for Depreciation 22,500.00
Accounts Payable 40,000.00
Capital 205,500.00 68,500.00
4,500.00 Elchico and Baylon would be investing cash worth of 68,500

20,000.00
80,000.00
108,000.00
90,000.00

10,000.00
40,000.00
205,500.00
68,500.00
68,500.00
nvestment
Baylon Total
68,500.00 137,000.00
80,000.00
10,000.00
108,000.00
90,000.00
22,500.00
40,000.00
68,500.00 342,500.00