Par

tner
shi
p–Basi
cConsi
der
ati
onsandFor
mat
ion 1

CHAPTER1

MULTI
PLECHOI
CEANSWERSANDSOLUTI
ONS

1-
1:a
Jose'
scapit
alshoul
dbecredi
tedf
ort
hemarketv
alueoft
hecomput
er
contr
ibut
edbyhim.
1-
2:b (40,
000+80,000)2/3=180,
000x1/3=60,
000.
1-
2:c

1-
3:a
Cash P100,000
Land 300,000
Mort
gagepay
abl
e ( 
 50,
000)
Netasset
s(Jul
i
o,capi
tal
) P350,
000

1-
4:b
Tot
alCapit
al(P300,
000/
60%) P500,
000
Per
la'
sint
erest __
____
40%
Perl
a'
scapi t
al P200,000
Less: Non-cashassetcont
ri
but
edatmarketval
ue
Land P 70,
000
Buil
ding 90,000
MortgagePayable (
  
40,000)
_120,
000
Cashcont
ri
but
ion P 
80,
000

1-
5:d -Zer
o,becauseundert
hebonusmet
hod,
atr
ansf
erofcapi
tal
isonl
yrequi
red.

1-
6:b
Rey
es Sant
os
Cash P200,
000P300,
000
I
nventory –150,
000
Bui
lding –400,
000
Equipment 150,
000
Mortgagepay
abl
e _
___
___
_( 
100,
000)
Netasset(
capi
tal
) P350,
000P750,
000

1-
7:c
AA BB CC
Cash P 50,
000
Propert
yatMarketValue P 80,
000
Mortgagepayabl
e (  
35,
000)
EquipmentatMarketVal
ue _
___
___
_____
__P55,
000
Capi
tal P 
50,
000P 
45,
000P55,
000
2 Chapt
er1

1-
8:a
PP RR SS
Cash P 
50,
000 P 
80,000P 25,
000
Comput
eratMar
ketVal
ue __
25,
000 ___
_ _
__¬¬__60,
000
Capi
tal P 
75,
000 P 
80,
000P 
85,
000
1-
9:c
Mar
ia Nor
a
Cash P 
30,
000
Merchandiseinv ent
ory P 90,000
Comput erequipment 160,000
Li
abil
ity ( 
60,000)
Fur
nitureandFi xtur
es 200,
000________
Tot
alcont
ri
but
ion P230,
000P190,
000

Tot
alagr
eedcapi
tal
(P230,
000/
40%) P575,
000
Nor
a'si
nter
est __
____
60%
Nora'
sagreedcapi
tal P345,
000
Less:
inv
estment 190,
000
Casht
obei
nvest
ed P155,
000

1-
10:
d
Roy Sam Ti
m
Cash P140,000– –
Off
iceEquipment – P220, 000–
Notepayable ___
__ _
___
( 60,
000) _
___
__
Netasseti
nvest
ed P140,
000P160,
000 P 
   
 –

Agr
eedcapi
tal
s,equal
l
y(P300,
000/
3)= P100,
000

1-
11:
a
Lar
a Mi
tr
a
Cash P130,000P200,
000
Computerequi
pment – 50,000
Notepayabl
e ___
__ _
__ ¬_ (
 10,000)
Netasseti
nvest
ed P130,
000P240,
000

Goodwi
l
l(P240,
000-P130,
000)= P110,
000

1-
12:
a
Per
ez Rey
es
Cash P 
50,
000 P 70,000
Off
iceEquipment 30,
000 –
Merchandi
se – 110,000
Fur
nitur
e 100,000
Notespayabl
e _
___
___ (
  
50,000)
Netasseti
nvest
ed P 
80,
000 P230,
000
Par
tner
shi
p–Basi
cConsi
der
ati
onsandFor
mat
ion 3

BonusMethod:
Tot
alcapi
tal
(netasseti
nvest
ed) P310,
000

Goodwil
lMethod:
Netasset
sinvested P310,
000
Add:Goodwil
l(P230,
000-
P80,
000) _150,
000
Netcapi
tal P460,
000

1-
13:
b
Requir
edcapi t
alofeachpart
ner(
P300,
000/2) P150,
000
Contr
ibutedcapital
ofRuiz
:
Totalassets P105,
000
LessLiabil
it
ies __15,
000 __90,
000
Casht
obecont
ri
but
edbyRui
z P 
60,
000

1-
14:
d
Totalassets:
Cash P 70,
000
Machi nery 75,
000
Buildi
ng _
225,000 P370,
000
Less:Liabi
lit
ies(Mor
tgagepay
abl
e) __90,
000
Netasset
s(equalt
oFer
rer
'scapi
talaccount
) P280,
000
Di
videbyFerr
er'
sP&Lsharepercentage __
__70%
Tot
alpar
tner
shi
pcapi
tal P400,
000

Requir
edcapitalofCruz(P400,
000X30%) P120,
000
LessAssetsalreadycontr
ibut
ed:
Cash P 30,
000
Machineryandequipment 25,
000
Furni
tur
eandf ixt
ures _
_10,
000 __65,
000
Casht
obei
nvest
edbyCr
uz P 
55,
000

1-
15:
d
Adjust
edassetsofCBorja
Cash P  
2,500
AccountsRecei
vabl
e( P10,
000-P500) 9,
500
Merchandi
seinvent
ory(P15,000-
P3, 12,
000) 000
Fi
xtur
es __20,
000 P  44,000
Assetcontr
ibut
edbyD.Ar ce:
Cash P 20,000
Merchandi
se __10,
000 _ _30,000
Tot
alasset
soft
hepar
tner
shi
p P 
74,
000
4 Chapt
er1

1-
16:
a
Cashtobei nv estedbyMendez:
Adjustedcapi t
alofLopez(2/3)
Unadj ustedcapit
al P158,
400
Adjust ments:
Pr epaidexpenses 17,
500
Accr uedexpenses ( 
  
5,000)
Allowancef orbaddebts(5%XP100,
000) _(
  
 5,000)
Adj
ust
edcapi
tal P165,
900

Tot
al par
tner
shi
pcapital(
P165,
900/
2/3) P248,
850
Mul
tiplybyMendez'
sinter
est ⅓
Mendez'
scapital P 
82,
950
LessMerchandisecont
ri
but
ed ¬¬¬__
50,
000
Casht
obei
nvest
edbyMendez P 
32,
950

Tot
al Capit
al:
Adjustedcapi
tal
ofLopez P165,900
Contri
butedcapi
tal
ofMendez __
82,950
Tot
alcapi
tal P248,
850
1-
17:
d
Moran,capit
al(40%)
Cash P 
15,000
Furni
tur
eandFixtur
es _
100,
000P115,000
Di
vi
debyMor an'sP&Lshareper
cent
age __
____40%
Tot
al par
tner
shi
pcapi
tal P287,
500
Mul
tiplybyNakar
'sP&Lshar
eper
cent
age __
____
60%
Requir
edcapitalofcr
edi
tofNakar
: P172,
500
Contr
ibutedcapit
alofNakar:
Merchandiseinv
entor
y P 
45,
000
Land 15,
000
Buil
ding __
65,
000
Total
assets P125,
000
LessLiabi
l
iti
es __30,
000P 
95,
000
Requi
redcashi
nvest
mentbyNakar P 
77,
500

1-
18:
c
Gar
cia'
sadj
ust
edcapi
tal
(seeschedul
e1) P40,
500
Di
vi
debyGarci
a'sP&Lsharepercent
age ¬¬¬_
___
__40%
Tot
al par
tner
shi
pcapi
tal P101,
250
Fl
ores'P&Lshareper
centage __
____
60%
Fl
ores'
capi
talcr
edi
t P 
60,
750
Fl
ores'
cont
ribut
edcapi
tal
(seeschedul
e2) __
43,
500
Addi
ti
onalcasht
obei
nvest
edbyFl
ores P 17,
250
Par
tner
shi
p–Basi
cConsi
der
ati
onsandFor
mat
ion 5

Schedul
e1:
Garci
a,capit
al:
Unadjust
edbal ance P 
49,
500
Adjustments:
Accumulateddepreci
ati
on (
  
 4,
500)
All
owancef ordoubtf
ulaccount (
  
 4,
500)
Adj
ust
edbal
ance P 
40,
500

Schedul
e2:
Fl
orescapital
:
Unadjust
edbal ance P 
57,
000
Adjustments:
Accumulateddepreci
ati
on (
  
 1,
500)
All
owancef ordoubtf
ulaccount
s (
  
12,000)
Adj
ust
edbal
ance P 
43,
500
1-
19:
d
Or
ti
z Ponce Tot
al
(
  
  
 60%)( 
  
  
40%)
Unadjustedcapitalbal
ances P133,000P108,000P241,
000
Adj
ust ment s:
Allowanceforbaddebts (  
 2,700)( 
  
1,800)
( 
  
4,500)
I
nv entori
es 3,0002,
000 5,000
Accr uedexpenses _
(  
 2,400)( 
  
1,600)
( 
  
4,000)
Adj
ust
edcapi
tal
bal
ances P130,
900P106,
000P237,
500

Tot
alcapi
tal
bef
oret
hef
ormat
ionoft
henewpar
tner
shi
p(seeabov
e)
P237,
500
Di
vi
debyt
het
otal
per
cent
ageshar
eofOr
ti
zandPonce(
50%+30%)
_
___
__80%
Tot
alcapi
tal
oft
hepar
tner
shi
pbef
oret
headmi
ssi
onofRoxas
P296,
875
Mul
ti
plybyRoxas'
int
erest _
___
__20%
Casht
obei
nvest
edbyRoxas P 
59,
375

1-
20:
d
Mer
chandi
setobeinvest
edbyGomez :
Total
par
tner
shipcapit
al(
P180,
000/60%)P300,
000

Gomez'scapi
tal
(P300,
000X40%) P120,000
LessCashinv
estment __
30,000
Mer
chandi
set
obei
nvest
edbyGomez P 
90,
000

Cashtobei nvestedbyJocson:
Adjust
edcapi t
alofJocson:
Totalassets(atagr
eedvaluat
ions) P180,000
LessAccount spayabl
e __
48,000P132,
000
 Requi
redcapi
tal
ofJocson _
180,
000
Casht
obei
nvest
edbyJocson P 
48,
000

6
Chapt
er1

1-
21:
b
Unadjust
edEll
,capi
tal(P75,
000–P5,
000) P 70,000
Al
lowancefordoubtful
accounts ( 
  
1,000)
Accountspay
able ( 
  
4,000)
Adj
ust
edEl
l
,capi
tal P 
65,
000

1-
22:
c
Total
par
tner
shi
pcapit
al(
P113,
640/
1/3) P340,
920
LessDav
id'
scapi
tal _113,
640
Cor
tez'
scapi t
alafteradj
ustments P227,
280
Adj
ustment smade:
Al
lowancef ordoubtf
ulaccount(
2%XP96,
000) 1,920
Merchandiseinvent
ory (
  
16,000)
Prepai
dexpenses ( 
  
5,200)
Accruedexpenses ___3,200
Cor
tez'
scapi
talbef
oreadj
ust
ment
s P211,
200
1-
23:
a
Totalassetsatf
airv
alue P4,
625,000
Li
abil
iti
es (
1,125,
000)
Capit
albalanceofFl
or P3,
500,000

1-
24:
c
Totalcapitalofthepartner
ship(P3, 000÷70%)
500,
P5,
000,
000
Edenagr eedpr ofi
t&lossratio 30%
Edenagr eedcapi t
al
1,
500,
000
Edencont ribut
edcapitalatfai
rval
ue
812,
000
All
ocatedcasht obeinvestedbyEden P 688,
000

1-
25:
c
__Rey _ _Sam_ _ _
Tim __Total
_
Contri
but
edcapi t
al(asset
s-l
iabi
li
ti
es)
P471,000P291, 000P195,000
P957,
000Agreedcapi
tal(prof
itandlossrati
o) 382,
800 382, 800 191,400 957,000
Capit
altr
ansfer(Bonus) P88,200P(91,800)P 3, 600 -

1-
26:
d
Total
agreedcapi
tal(
P90,000÷40%)
P225,
000
Contr
ibut
edcapit
alofCandy(P126,
000+P36,
000-
P12,
000)
150,
000
Total
agreedcapi
tal(
P90,000÷40%)
225,
000
Candy,agreedcapit
ali
nter
est 60%
Agreedcapital
ofCandy 135,000
Contri
butedcapit
alofCandy
150,
000
Wi
thdr
awal P15,
000

Par
tner
shi
p–Basi
cConsi
der
ati
onsandFor
mat
ion 7

1-
27:
a
Totalagreedcapital (210,
000÷70%)
P300,
000
Nora’sinter
est 30%
Agreedcapi t
alofNora P 90,
000
Cashi nvest
ed 42,000
Casht obeinvestedbyNor
a P
48,
000

1-
28:
a
Contri
but
edcapitalofMay(P194,
000-P56,
000) P138,
000
Agreedcapi
talofMay(P300,000x70%) 210,
000
CashtobeinvestedbyMay P
72,
000

1-
29:
c
__
Alex__
Car
los_ __Tot
al__
Contri
but
edcapit
al P100,
000 P84,
000 P184,
000
Agreedcapi
tal 92,
000 92,
000
184,
000
Capi
tali
nvest
ed P(8,
000) P 8,
000 -
8
Chapt
er1

SOLUTI
ONSTOPROBLEMS

Pr
obl
em 1–1

1. a. BooksofPedr
oCast
rowi
l
lber
etai
nedbyt
hepar
tner
shi
p

Toadj
ustt
heasset
sandl
i
abi
l
iti
esofPedr
oCast
ro.

1.Pedr
oCast r
o,Capi
tal 600
Merchandi
seInv
entor
y 600

2.Pedr
oCast r
o,Capi
tal 200
Al
lowanceforBadDebt
s 200

3.AccruedI
nter
estReceiv
abl
e 35
PedroCast
ro,Capi
tal 35

Computat
ion:
P1,
000x6%x3/
12= P15
P2,
000x6%x2/
12= _20
Tot
al P35

4.PedroCast
ro,
Capital 100
Accr
uedInt
erestPayabl
e 100
(P4,
000x5%x6/ 12=P100)

5.PedroCast
ro,Capi
tal 800
Accumul
atedDepreci
ati
on–Fur
nit
ureandFi
xtur
es 800

6.Of
fi
ceSuppl
i
es 400
Pedr
oCastro,
Capi
tal 400

Tor
ecor
dthei
nvest
mentofJoseBunag.
 Cash 15,
067.
50
JoseBunag,
Capi
tal 15,
067.
50

Comput
ati
on:
PedroCast
ro,Capit
al
(
1) P600 P31, 400
(
2) 200 35 (3)
(
4) 100 400 (6)
(
5)_ __
800
P1,
700 P31,835
P30,135
JoseBunag,
Capi
tal : 1/
2xP30,
135=P15,
067.
50

Par
tner
shi
p–Basi
cConsi
der
ati
onsandFor
mat
ion 9

b. Anewsetofbookswi
l
lbeused

BooksofPedr
oCast
ro

Toadj
ustt
heasset
sandl
i
abi
l
iti
es.

SeeRequi
rement(
a).

Tocl
oset
hebooks.

NotesPay abl
e 4,
000
Account sPay able 10,
000
AccruedI nterestPay able 100
Al
lowancef orBadDebt s 1,
200
Accumul atedDepr eci at
ion–Furni
tur
eandFi
xtur
es 1,
400
PedroCast r
o, Capi tal 30,
135
Cash 6,
000
NotesRecei v
abl e 3,
000
Account sRecei vable 24,
000
Accr uedInt erestRecei v
abl
e 35
Mer chandi seI nv entory 7,
400
Offi
ceSuppl i
es 400
FurnitureandFi xtures 6,
000

NewPar
tner
shi
pBooks

Tor
ecor
dthei
nvest
mentofPedr
oCast
ro.

Cash 6,
000
NotesReceivabl
e 3,
000
AccountsReceivabl
e 24,
000
AccruedInt
erestRecei
vabl
e 35
 MerchandiseInventory 7,
400
Off
iceSupplies 400
Fur
nitur
eandFi xtures 6,
000
NotesPay abl
e 4,
000
AccountsPay able 10,
000
AccruedInterestPayable 100
Al
lowancef orBadDebt s 1,
200
AccumulatedDepr eciat
ion–Fur
nit
ureandFi
xtur
es 1,
400
PedroCast r
o, Capi
tal 30,
135

Tor
ecor
dthei
nvest
mentofJoseBunag.

Cash 15,
067.
50
JoseBunag,
Capi
tal 15,
067.
50

10
Chapt
er1

2. Cast
roandBunagPartner
shi
p
Bal
anceSheet
October1,
2008
Assets

Cash
P21,067. 50
Notesr eceivable 3,
000.
00
Account srecei vable P 
24,
000
LessAl l
owancef orbaddebt s __
_1,
200 22,
800.
00
Accr uedinterestr ecei
vable 35.
00
Mer chandisei nvent or
y 7,
400.
00
Offi
cesuppl i
es
400.00
Furnitur
eandf ixtures 6,
000
LessAccumul ateddepr eci
ati
on _
__1,
400 __4,
600.
00
TotalAsset s P59,
302.
50

Li
abi
l
iti
esandCapi
tal

Notespay able P 4,

000.
00
Accountspay able 10,
000.
00
Accruedinterestpayabl
e 100.
00
PedroCast r
o, Capit
al 30,
135.
00
JoseBunag, Capital _15,
067.
50
TotalLiabil
it
iesandCapi
tal P59,
302.
50

Pr
obl
em 1–2
Cont
ri
but
edCapi
tal
s:
 Jose: Capi t
albefor
eadjust
ment P 85,000
NotesPayable 62,000
Underval
uati
onofinvent
ory 13,000
Underdepr
eciat
ion (
 25,000) P 
 135,
000
Pedro:Cash 28,
000
Pablo:Cash 11,
000
Marketabl
esecuri
ti
es _
57,
500 ¬_
__68,
500
Tot
al contr
ibutedcapit
al P  
231,
500

Agr
eedCapital
s:
BonusMet hod:
Jose(P231,500x50%) P115,
750
Pedro(P231,500x25%) 57,
875
Pablo(P231,500x25%) __57,
875
Total P231,
500

Par
tner
shi
p–Basi
cConsi
der
ati
onsandFor
mat
ion 11

Goodwi
llMet
hod.Tohav
eagoodwi
l
l,t
heonl
ypossi
blebasei
sthecapi
tal
ofPabl
o.The
comput
ati
onis:

Contr
ibuted Agreed
Capit
al Capital Goodwi
l
l
Jose P135,
000P137,
000(50%)2,
000
Pedro 28,
000 68,500(
25%) 40,
500
Pablo __68,
500 __
68,500(
25%) ___
__–
Total P231,
500274,
000 42,
500

Tot
alagr
eedcapi
tal
(P68,
50025%)=274,
000

Jose,
Pedr
oandPabloPart
ner
shi
p
Bal
anceSheet
June30,
2008

BonusMet
hod Goodwi
l
lMet
hod
Assets:
Cash P 49,
000 P 49,
000
Accountsrecei
vable(net
) 48,
000 48,
000
Marketabl
esecurit
ies 57,
500 57,
500
I
nventory 85,
000 85,
000
Equipment(net
) 45,
000 45,
000
Goodwill ____
__– __42,
500
Total P284,
500 P327,
000

Li
abi
l
iti
esandCapi
tal
:

Account
spay
abl
e P 
53,
000 P 
53,
000
 Jose,capit
al(
50%) 115,
750 137,
000
Pedro,capi
tal(
25%) 57,
875 68,
500
Pablo,capi
tal
(25%) __57,
875 __68,
500
Total P284,
500 P327,
000

Pr
obl
em 1–3

1. BooksofPepeBasco

Toadj
ustt
heasset
s.

a.PepeBasco,Capi
tal 3,
200
Est
imatedUncol
lect
ibl
eAccount 3,
200

b.PepeBasco,
Capit
al 500
Accumul
atedDepr
eci
ati
on–Fur
nit
ureandFi
xtur
es 500
12
Chapt
er1

Tocl
oset
hebooks.

Est
imat edUncol l
ect i
bleAccount 4,
800
Accumul atedDepr eciati
on–Furnit
ureandFi
xtur
es 1,
500
Account sPay abl
e 3,
600
PepeBasco, Capit
al 31,
500
Cash 400
Account sRecei vable 16,
000
Mer chandiseInv entor
y 20,
000
FurnitureandFi xtur
es 5,
000

2. Booksoft
hePar
tner
shi
p

Tor
ecor
dthei
nvest
mentofPepeBasco.

Cash 400
Account sReceivable 16,
000
Mer chandi
seInv entory 20,
000
Furnitur
eandFi xtures 5,
000
Est i
matedUncol l
ect
ibleaccount 4,
800
Accumul atedDepr eciati
on–Furnit
ureandFi
xtur
es 1,
500
Account sPay able 3,
600
PepeBasco, Capital 31,
500

Tor
ecor
dthei
nvest
mentofCar
loTor
re.

Cash 47,
250
Car
loTor
re,
Capi
tal 47,
250

Comput
ati
on:
 PepeBasco, capit
al(Base) P31,
500
Div
idebyPepeBasco' sP&Lr ati
o _
__40%
Totalagreedcapital P78,
750
Multi
plybyCar l
oTor r
e'sP&Lr at
io _
__60%
Casht obeinvestedbyCarloTorre P47,
250

Pr
obl
em 1–4

a. Roces'
bookswi
l
lbeusedbyt
hepar
tner
shi
p

BooksofSal
es
1.Adj
ust
ingEnt
ri
es

(
a)Sal
es,Capi
tal 3,
200
Accumul
atedDepr
eci
ati
on–Fi
xtur
es 3,
200

(
b)Goodwil
l 32,
000
Sal
es,Capi
tal 32,
000
Par
tner
shi
p–Basi
cConsi
der
ati
onsandFor
mat
ion 13

2. Cl
osi
ngEnt
ry

All
owancef orBadDebt s 12,
800
Accumul atedDepr eci
ati
on–Del
iveryEqui
pment 8,
000
Accumul atedDepr eci
ati
on–Fi
xtures 91,
200
Account sPay abl
e 64,
000
NotesPay able 40,
000
AccruedTaxes 8,
000
Sal
es, Capi t
al 224,
000
Cash 4,
800
Account sInventor
y 72,
000
Mer chandiseInventor
y 192,
000
Prepai dInsur
ance 3,
200
DeliveryEquipment 48,
000
Fixtures 96,
000
Goodwi l
l 32,
000

BooksofRoces(
Booksoft
hePar
tner
shi
p)

1. Adj
ust
ingEnt
ri
es

(
a)Roces,Capi
tal 1,
600
All
owanceforBadDebt
s 1,
600

(
b)Accumulat
edDepreci
ati
on–Fi
xtur
es 16,
000
Roces,
Capi
tal 16,
000

(
c)Mer
chandi
seI
nventor
y 8,
000
Roces,
Capi
tal 8,
000
 (
d)Goodwil
l 40,
000
Roces,
Capi
tal 40,
000

2. Tor
ecor
dthei
nvest
mentofSal
es.

Cash 4,
800
Account sRecei vable 72,
000
Merchandi seI nventory 192,
000
PrepaidInsur ance 3,
200
Deli
veryEqui pment 48,
000
Fi
xtures 96,
000
Goodwi ll 32,
000
All
owancef orBadDebt s 12,
800
Accumul atedDepr eci
ati
on–Del
iveryEqui
pment 8,
000
Accumul atedDepr eci
ati
on–Fi
xtures 91,
200
Account sPay able 64,
000
Not esPay able 40,
000
Accr uedTaxes 8,
000
Sales, Capi t
al 224,
000
14
Chapt
er1

b. Sal
es'
bookswi
l
lbeusedbyt
hepar
tner
shi
p

BooksofRoces

1.Adj
ust
ingEnt
ri
es

SeeRequi
rement(
a).

2.Cl
osi
ngEnt
ry

Al
lowancef orBadDebt s 1,
600
AccumulatedDepr eciat
ion–Del
iveryEqui
pment 12,
800
AccumulatedDepr eciat
ion–Fi
xtures 64,
000
AccountsPay abl
e 104,
000
AccruedTaxes 6,
400
Roces,Capital 224,
000
Cash 14,
400
AccountsRecei vabl
e 57,
600
MerchandiseInventory 132,
800
PrepaidInsur
ance 4,
800
Deli
veryEquipment 19,
200
Fixt
ures 144,
000
Goodwi l
l 40,
000

BooksofSal
es(
Booksoft
hePar
tner
shi
p)

1. Adj
ust
ingEnt
ri
es

SeeRequi
rement(
a).
2. Tor
ecor
dthei
nvest
mentofRoces.

Cash 14,
400
AccountsRecei vable 57,
600
MerchandiseI nventory 132,
800
PrepaidInsurance 4,
800
Deli
veryEquipment 19,
200
Fi
xtures 144,
000
Goodwi l
l 40,
000
All
owancef orBadDebt s 1,
600
Accumul atedDepr eci
ati
on–Del
iveryEqui
pment 12,
800
Accumul atedDepr eci
ati
on–Fi
xtures 64,
000
Account sPay able 104,
000
AccruedTaxes 6,
400
Roces, Capital 224,
000

Par
tner
shi
p–Basi
cConsi
der
ati
onsandFor
mat
ion 15

c. Anewsetofbookswi
l
lbeopenedbyt
hepar
tner
shi
p

BooksofRoces

1.Adj
ust
ingEnt
ri
es

SeeRequi
rement(
a).

2.Cl
osi
ngEnt
ry

SeeRequi
rement(
b).

BooksofSal
es

1.Adj
ust
ingEnt
ri
es

SeeRequi
rement(
a).

2.Cl
osi
ngEnt
ry

SeeRequi
rement(
a).

NewPar
tner
shi
pBooks

Tor
ecor
dthei
nvest
mentofRocesandSal
es.

Cash 19,
200
 Account sRecei vable 129,
600
Merchandi seI nventory 324,
800
PrepaidInsur ance 8,
000
Deli
veryEqui pment( net
) 46,
400
Fi
xtures( net) 84,
800
Goodwi ll 72,
000
All
owancef orBadDebts 14,
400
Account sPay able 168,
000
Not esPay able 40,
000
Accr uedTaxes 14,
000
Roces, Capital 224,
000
Sales, Capi t
al 224,
000

16
Chapt
er1

Pr
obl
em 1–5

1. Tocl
oseMagno'
sbooks.

All
owancef orBadDebt s 1,
000
AccountsPay able 6,
000
NotesPay abl
e 10,
000
AccruedInter
estPay abl
e 300
R.Magno, Capital 24,
700
Cash 5,
000
AccountsRecei v
able 13,
000
MerchandiseInventor
y 12,
000
Equipment 3,
000
OtherAssets 9,
000

2. Toadj
ustt
hebooksofLagman.

Goodwill 8,
000
All
owanceforBadDebt
s 210
J.Lagman,
Capital 7,
790

3. Tor
ecor
dthei
nvest
mentofMagno.

Cash 5,
000
AccountsRecei
vabl
e 13,
000
Merchandi
seInvent
ory 12,
000
 Equipment 3,
000
OtherAssets 9,
000
All
owancef orBadDebts 1,
000
AccountsPay able 6,
000
NotesPay abl
e 10,
000
AccruedInter
estPayabl
e 300
R.Magno, Capital 24,
700

Toadj
ustt
hei
nvest
ment
soft
hepar
tner
s.

Cash 10,
300
R.Magno,
Capital 10,
300
(P35,
000–P24,700=P10,
300)

J.Lagman,Capi
tal 35,
790
Cash 23,
300
Account
sPay abl
etoJ.Lagman 12,
490
(P63,
000+P7,790=P70,790–P35,000=P35,
790)

Par
tner
shi
p–Basi
cConsi
der
ati
onsandFor
mat
ion 17

4. LagmanandMagno
Bal
anceSheet
December31,2008

Assets

Cash P 
  
  
 –
Accountsreceiv
abl e P34,
000
LessAllowancef orbaddebt
s 1,
210 32,
790
Merchandiseinventory 21,
000
Equipment 8,
000
Otherassets 46,
000
Goodwill _
__8,
000
TotalAssets P115,
790

Li
abi
l
iti
esandCapi
tal

Accountspay able P 18,

000
Notespay able 15,
000
Accruedinterestpayabl
e 300
Accountspay abletoJ.Lagman 12,
490
J.Lagman, capital 35,
000
R.Magno, capital __35,
000
TotalLiabil
it
iesandCapit
al P115,
790

Pr
obl
em 1–6
1. BooksofTol
edo

Tol
edo,
Capit
al 4,
800
All
owancef s(
orBadDebt 15%xP32,
000) 4,
800

BooksofUr
eta

Ur
eta,
Capi
tal 2,
400
All
owancef s(
orBadDebt 10%xP24,
000) 2,
400

Cash(90%xP12,000) 10,
800
Lossf
rom SaleofOff
iceEqui
pment 1,
200
Of
ficeEqui
pment 12,
000

Toledo,Capit
al(
1/4xP1,
200) 300
Ureta,Capi
tal 900
Lossf r
om Sal
eofOff
iceEqui
pment 1,
200

18
Chapt
er1

2. NewPar
tner
shi
pBooks

Cash 3,
200
AccountsReceivable 32,
000
Merchandise 40,
000
Off
iceEquipment 10,
000
All
owancef orBadDebts 4,
800
AccountsPay abl
e 10,
000
NotesPay abl
e 2,
000
Toledo,Capit
al 68,
400
TorecordtheinvestmentofTol
edo.

Cash 22,
800
AccountsReceivable 24,
000
Merchandi
se 36,
000
Tol
edo,Capital 300
Al
lowableforBadDebt s 2,
400
AccountsPay abl
e 16,
000
Uret
a,Capital 64,
700
TorecordtheinvestmentofUr
eta.

3. Cash 3,
400
Uret
a,Capi
tal 3,
400
TorecordUret
a'scashcont
ri
but
ion.

Comput
ati
on:
 Toledo, capi t
al(P68,
400–P300) P 68,100
Divi
debyTol edo'sprof
itshareper
centage __
__50%
Total agreedcapi tal
oft hepart
ner
ship P136,200
MultiplybyUr et
a'sprofi
tshareper
centage __
__50%
Agreedcapi talofUreta P 68,100
Ureta, capital __64,700
Cashcont r
ibuti
onofUr eta P  
3,400
or
Toledo, capi t
al(P68,
400–P300) P 
68,100
LessUr eta,capit
al __
64,700
Cashcont r
ibuti
onofUr eta P  3,
400

Par
tner
shi
p–Basi
cConsi
der
ati
onsandFor
mat
ion 19

4. Tol
edoandUr etaPar
tner
shi
p
BalanceSheet
July1,2008

Assets

Cash P 
29,
400
Accountsrecei
vable P56,
000
LessAllowanceforbaddebt
s __7,
200 48,
800
Merchandise 76,
000
Offi
ceequipment __10,
000
TotalAsset
s P164,
200

Li
abi
l
iti
esandCapi
tal

Account spay abl

e P 26,
000
Notespay able 2,
000
Toledo, capit
al 68,
100
Ureta,capital __68,
100
Tot alLiabi
li
ti
esandCapi
tal P164,
200