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Assignment01 SOLUTION PDF
Assignment01 SOLUTION PDF
Problem 1
1. Provide the journal entry to record the partner’s contributions. (5 points)
Mr. Sun Ms. Moon
Cash 400,000
Accounts receivable 200,000
Equipment 150,000
Land 1,000,000
Mortgage payable (250,000)
Adjusted capital balances 600,000 900,000
Cash 400,000
Accounts receivable 200,000
Equipment 150,000
Land 1,000,000
Mortgage payable 250,000
Mr. Sun, Capital 600,000
Ms. Moon, Capital 900,000
2. Which partner should make an additional contribution and by how much? (5 points)
Using Mr. Sun’s capital: 600K ÷ 50% = 1.2M x 50% interest of Ms. Moon = 600K vs. 900K Ms.
Moon’s actual contribution; Conclusion: Ms. Moon’s actual contribution is not deficient.
Using Ms. Moon’s capital: 900K ÷ 50% = 1.8M x 50% interest of Mr. Sun = 900K vs. 600K Mr. Sun’s
actual contribution; Conclusion: Mr. Sun’s actual contribution is deficient by 300K.
Answer: Mr. Sun should make an additional contribution of ₱300,000.
Cash 400,000
Accounts receivable 200,000
Equipment 150,000
Land 1,000,000
Mortgage payable 250,000
Mr. Sun, Capital 750,000
Ms. Moon, Capital 750,000
Cash 400,000
Accounts receivable 200,000
Equipment 150,000
Land 1,000,000
Mortgage payable 250,000
Mr. Sun, Capital 750,000
Ms. Moon, Capital 750,000
Mr. Sun pays Ms. Moon ₱150,000. This transaction is not recorded in the partnership books.
Requirement B: Provide the simple journal entries to record the partner’s contributions. (8 points) BONUS
Cash 400,000
Accounts receivable 200,000
Mr. Sun, Capital 600,000
Equipment 150,000
Land 1,000,000
Mortgage payable 250,000
Ms. Moon, Capital 900,000
5. Which partner shall make an additional investment and which partner shall withdraw part of his/her
investment? (5 Points)
Mr. Sun Ms. Moon
Actual contribution 600,000 900,000
Required contribution (750,000) (750,000)
(Additional investment)/Withdrawal (150,000) 150,000
Mr. Sun shall invest an additional ₱150,000, while Ms. Moon shall withdraw ₱150,000.
Problem 2
Requirement A: A new set of books are to be opened for the partnership. (20 points)
Cash 70,000
Accounts receivable 460,000
Merchandise inventory 95,000
Prepaid insurance 10,000
Equipment 120,000
Furniture and fixture 90,000
Allowance for bad debts 60,000
Accounts payable 250,000
Notes payable 50,000
Cash 50,000
Accounts receivable 490,000
Merchandise inventory 70,000
Prepaid insurance 5,000
Equipment 70,000
Allowance for bad debts 40,000
Accounts payable 160,000
Notes payable 35,000
May, Capital 450,000
Requirement B: The books of May are to be used by the partnership. (17 points)
7 points (2, 3, 2)
Adjusting entries
May, Capital 10,000
Allowance for bad debts 10,000
OR
May, Capital 14,000
Accumulated depreciation - equipment 18,000
Allowance for bad debts 10,000
Merchandise inventory 2,000
Equipment 20,000
10 points
Investment of April
Cash 70,000
Accounts receivable 460,000
Merchandise inventory 95,000
Prepaid insurance 10,000
Equipment 120,000
Furniture and fixture 90,000
Allowance for bad debts 60,000
Accounts payable 250,000
Notes payable 50,000
April, Capital 485,000
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