2-3
1. Books of Partnership (Jack)
A. Adjustments
a) Jack, Capital 5,500
Inventories 5,500
b) Jack, Capital 20,000
Accounts receivable 20,000
c) Jack, Capital 2,000
Other assets 2,000
B. Investment of Jill
Cash 22,354
Accounts receivable 532,890
Inventories 253,402
Building 428,267
Furniture and fixtures 34,789
Accounts payable 243,650
Notes Payable 345,000
Jill, capital 683,052
2. Books of Jill
Adjustments
a) Jill, Capital 6,700
Inventories 6,700
b) Jill, Capital 35,000
Accounts receivable 35,000
c) Jill, Capital 3,600
Other assets 3,600
Closing entry
Accounts payable 243,650
Notes Payable 345,000
Jill, capital 683,052
Cash 22,354
Accounts receivable 532,890
Inventories 253,402
Building 428,267
Furniture and fixtures 34,789
3. New set of Books of Partnership
Investment of Jack
Cash 11,000
Accounts receivable 214,536
Inventories 114,535
Land 603,000
Furniture and fixtures 50,345
Accounts payable 178,940
Notes Payable 200,000
Jack, capital 614,476
Investment of Jill
Cash 22,354
Accounts receivable 532,890
Inventories 253,402
Building 428,267
Furniture and fixtures 34,789
Accounts payable 243,650
Notes Payable 345,000
Jill, capital 683,052
4)
JACK AND JILL
Statement of Financial Position
May 1, 2020
ASSETS LAIBILITIES AND CAPITAL
Cash P 33,354 Accounts Payable P 422,590
Accounts Receivable 747,426 Accrued Expenses 545,000
Inventories 367,937
Land 603,000
Building 428,267 Jack, Capital 614,476
Furniture and Fixtures 85,134 Jill, Capital 683,052
Total Assets P 2,265,118 Total Liabilities and Capital P2,265,118
2-6 1) Adjusted Capital of each Partner
Investment of Karl Investment of Kent
Merchandise inventory 500,000 Merchandise inventory 900,000
Machinery and Equipment 450,000 Building 2,450,000
Furniture and Fixtures 300,000 Machinery and equipment 950,000
Mortgage payable (1,300,000)
Karl, Capital 1,250,000 Kent, Capital 3,000,000
2.Required total partnership capital: Kent, Capital as the base: ( P 3,000,000/60% ) P 5,000,000
Karl share is 40% ( P 5,000,000 x 40%) P 2,000,000
Less Adjusted Karl, Capital before additional cash investment 1,250,000
*Additional cash investment of Karl P 750,000
2-7 1) Capital credit based on Profit and Loss ratio
Required total partnership capital using Jolo, Capital as the base:
( P 400,000 + 650,000) /30% P3,500 ,000
Joko share is 70% ( P 3,500,000 x 70%) P 2,450,000
Less Joko, Capital before additional cash investment
(500,000 + 1,150,000 + 750,000 – 350,000) 2,050,000
*Additional cash investment of Joko P 400,000
2)
Investment of Joko Investment of Jolo
Cash 600,000 Cash 400,000
Merchandise inventory 500,000 Equipment 650,000
Land 1,150,000 Jolo, Capital 1,050,000
Building 750,000 Add Joko, Capital 2,650,000
Mortgage payable (350,000)
Joko, Capital 2,650,000 Total Partnership Capital 3,700,000
3) Mortgage Payable 350,000
Add Total Partnership Capital 3,700,00
0
Total Assets of the Partnership 4,050,00 Using A = L + C
0
Ex. 2-8
1. Using Fair Value
Acct. Rec., net P 90,000
Mer. Inventory 150,000
Acct. Payable (40,000)
Jason, Capital P200,000
2. Using Fair Value
Acct. Rec., net P 40,000
Mer. Inventory 2400,000
P and E, net 320,000
Acct. Payable (280,000)
Jerry, Capital P320,000
3. Required Capital P350,000
Jerry, Capital (320,000)
Investment P 30,000
4. Required Capital P350,000
Jason, Capital (200,000
Investment P 150,000
5. Cash (nos. 3 & 4)) P180,000
Total AR, net 130,000
Total MI 390,000
Total Current Assets P 700,000
6. Total Current Assets P 700,000
P & E, net 320,000
Total Assets P 1,020,000
Ex. 2-9 Appraised value of P5,000,000
