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    HOMEWORK 1 (No. 14)

    Uploaded by

    Joana Trinidad
    The document provides adjustments and closing entries for the formation of a partnership between Steve and Guy. It shows Steve contributing assets totaling ₱112,500 and Guy contributing assets totaling ₱91,000. To comply with the agreed equity of ₱100,000 per partner, Steve would withdraw an additional ₱12,500 in cash while Guy would contribute ₱9,000 more. Alternatively, using a bonus method, Steve would receive a ₱12,500 bonus and Guy a ₱9,000 bonus to meet the equity agreement without additional cash transfers.

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    © All Rights Reserved
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    HOMEWORK 1 (No. 14)

    Uploaded by

    Joana Trinidad
    582 views7 pages
    The document provides adjustments and closing entries for the formation of a partnership between Steve and Guy. It shows Steve contributing assets totaling ₱112,500 and Guy contributing assets totaling ₱91,000. To comply with the agreed equity of ₱100,000 per partner, Steve would withdraw an additional ₱12,500 in cash while Guy would contribute ₱9,000 more. Alternatively, using a bonus method, Steve would receive a ₱12,500 bonus and Guy a ₱9,000 bonus to meet the equity agreement without additional cash transfers.

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    HOMEWORK 1 (no. 14)

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    The document provides adjustments and closing entries for the formation of a partnership between Steve and Guy. It shows Steve contributing assets totaling ₱112,500 and Guy contributing assets totaling ₱91,000. To comply with the agreed equity of ₱100,000 per partner, Steve would withdraw an additional ₱12,500 in cash while Guy would contribute ₱9,000 more. Alternatively, using a bonus method, Steve would receive a ₱12,500 bonus and Guy a ₱9,000 bonus to meet the equity agreement without additional cash transfers.

    Copyright:

    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
    Download as xlsx, pdf, or txt
    582 views7 pages

    HOMEWORK 1 (No. 14)

    Uploaded by

    Joana Trinidad
    The document provides adjustments and closing entries for the formation of a partnership between Steve and Guy. It shows Steve contributing assets totaling ₱112,500 and Guy contributing assets totaling ₱91,000. To comply with the agreed equity of ₱100,000 per partner, Steve would withdraw an additional ₱12,500 in cash while Guy would contribute ₱9,000 more. Alternatively, using a bonus method, Steve would receive a ₱12,500 bonus and Guy a ₱9,000 bonus to meet the equity agreement without additional cash transfers.

    Copyright:

    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
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    ADJUSTMENTS:

    Steve Health Store


    a.) Steve, Capital 5,000
    Allowance for Bad Debts 5,000

    b.) Steve, Capital 15,000


    Furniture and Equipment 15,000

    c.) Steve, Capital 10,000


    Merchandise Inventory 10,000

    d.) No Entry

    e.) Steve, Capital 2,500


    Interest Payable 2,500

    A.List down the adjusted assets and liabilities of each partner to determine partner's capital.

    CLOSING:
    Steve Health Store
    Accounts Payable 20,000
    Notes Payable 30,000
    Allowance for Bad Debts 5,000
    Interest Payable 2,500
    Steve, Capital 112,500
    Cash 25,000
    Accounts Receivable 25,000
    Merchandise Inventory 70,000
    Supplies Inventory 15,000
    Furniture and Equipment 35,000

    STEVE
    Steve, Capital
    5,000 145,000
    15,000
    10,000
    2,500
    32,500 145,000
    112,500

    Allowance for Bad Debts


    5000

    Furniture & Equpment


    50,000 15,000
    35,000

    Merchandise Inventory
    80,000 10,000
    70,000

    Interest Payable
    2,500

    Steve Guy
    Cash 25,000 11,000
    Accounts Receivable 25,000
    Allowance for Bad Debts - 5,000
    Merchandise Inventory 70,000
    Supplies Inventory 15,000 15,000
    Furniture and Equipment 35,000 70,000
    Total Assets 165,000 96,000

    Accounts Payable 20,000 5,000


    Notes Payable 30,000
    Interest Payable 2,500
    Capital 112,500 91,000
    Total Liabilities and Equity 165,000 96,000

    B.To comply with an agreed equity of Php 100,000 for each partner, show the additional cash to be invested or cash to be

    Cash 9,000
    Guy, Capital 9,000

    Agreed Capital 100,000


    Capital to be Contributed 91,000
    Required Additional Cash Capital 9,000

    Steve, Capital 12,500


    Cash 12,500

    Agreed Capital 100,000


    Capital to be Contributed 112,500
    Required Additional Cash Capital - 12,500

    C. Prepare two entries to record the investments of the partners in the partnership books.
    STEVE

    Cash 12,500
    Accounts Receivable 25,000
    Merchandise Inventory 70,000
    Supplies Inventory 15,000
    Furniture and Equipment 35,000
    Accounts Payable 20,000
    Notes Payable 30,000
    Allowance for Bad Debts 5,000
    Interest Payable 2,500
    Steve, Capital 100,000

    D. Prepare a statement of financial position just after formation.


    Health and Beauty Shop
    Statement of Financial Position
    December 31, 201X
    Amounts in Phlippine Peso

    ASSETS
    Current Assets
    Cash 32,500
    Accounts Receivable 25,000
    Allowance for Bad Debts - 5,000
    Merchandise Inventory 70,000
    Supplies Inventory 30,000 152,500
    Non Current Assets
    Furniture and Equipment 105,000
    Total 257,500

    LIABILITIES AND EQUITY


    Current Liabilities
    Accounts Payable 25,000
    Notes Payable 30,000
    Interest Payable 2,500 57,500
    Steve, Capital 100,000
    Guy, Capital 100,000 200,000
    Total 257,500

    E.Change the agreement listed in b) if instead of cash method, they agreed to use the bonus method to comply with the re
    for each partner. Prepare the third entry to ecord the bonus capital.

    Steve, Capital 12,500


    Guy, Capital 9,000
    Cash 3,500

    Steve Guy Total


    Agreed Capital 100,000 100,000 200,000
    Contributed Capital 112,500 91,000 203,500
    Bonus - 12,500 9,000 - 3,500
    Guy Beauty Store
    a.) No Entry

    b.) Guy, Capital 15,000


    Furniture and Equipment 15,000

    c.) No Entry

    d.) Guy, Capital 10,000


    Supplies Inventory 10,000

    e.) No Entry

    Guy Beauty Salon


    Accounts Payable 5,000
    Guy, Capital 91,000
    Cash 11,000
    Supplies Inventory 15,000
    Furniture and Equipment 70,000

    GUY
    Guy, Capital
    15,000 116,000
    10,000
    25,000 116,000
    91,000

    Furniture & Equipment


    85,000 15,000
    70,000

    Supplies Inventory
    25,000 10,000
    15,000

    sh to be invested or cash to be withheld by a partner.


    GUY

    Cash 20,000
    Supplies Inventory 15,000
    Furniture and Equipment 70,000
    Accounts Payable 5,000
    Guy, Capital 100,000

    s method to comply with the required Php 100,000 equity

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