Professional Documents
Culture Documents
into a partnership as of January 2,2016. The partners reach agreement on the following matters:
1. Each partner's capital contribution was the net amount of assets and liabilities taken
Red P40,200
Whit 20.200
Blue 40,600
Each partner guaranteed the collectability of their receivables from their clients:
2. Thepartners decided to occupy Blue's office space until the lease expired on June
rate for the space provided and that P900 monthly would be reasonable. They
agreed that the excess rent wouldbe charged to Blue at the end of the year. When
the lease expired on June 30,2016, the partnership moved to new ofice witha
3. No salaries are to be paid to the partners. The individuals partners are to receive 20
percent ofthe gross fees billed to theirrespective clients during the first year ofte
partnership. After deducting operating expenses (excluding the excess rent), the
residual profit should be credited to the partners' capital accounts in the following
percen fees from newbusiness obtained after April l,after deducting expenses
applicable to the new business. Expenses (excluding the excess rent are to be
apportioned to the newbusiness in the meratio that total expenses for the entire
year, other than bad debt losses, bore to the total gross fees.
accounts expenses but including the total amount paid for rent. Depreciation
Red P8,600
White 5,000
Blue 12,400
Depreciable assets were purchased during 2016 for P10,000, on which one
. Cash withdrawals charge to the partners' accounts during the year were:
Red P10.400
Whit 8,800
Blue 11,600
Green 5,000
be uncollectible. A new client billed in March for P3,000 had been adjudged
bankrupt, and a settlement of 40 cents on the peso was made.
Required: Prepare a Statement of Changes in Partners' Equity for the year ended