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  • Backflush and Safe Payments

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    Kristine Perez
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    The document contains 3 journal entries: 1) Recording initial capital contributions by partners A and C on January 2, 2017 totaling $350,000 with A contributing $200,000 and C contributing $100,000. 2) Recording admission of new partner B on January 2, 2018 with a capital contribution of $175,000 which increases A and C's capital by $49,075 and $48,075 respectively. 3) Preparing a schedule of partner capital accounts as of January 31, 2020 showing the balances for partners A, B, and C after contributions, loans, earnings/losses, and the total capital balance of $260,000.

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    Backflush and Safe payments

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    The document contains 3 journal entries: 1) Recording initial capital contributions by partners A and C on January 2, 2017 totaling $350,000 with A contributing $200,000 and C contributing $100,000. 2) Recording admission of new partner B on January 2, 2018 with a capital contribution of $175,000 which increases A and C's capital by $49,075 and $48,075 respectively. 3) Preparing a schedule of partner capital accounts as of January 31, 2020 showing the balances for partners A, B, and C after contributions, loans, earnings/losses, and the total capital balance of $260,000.

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    © All Rights Reserved
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    8 views1 page

    Backflush and Safe Payments

    Uploaded by

    Kristine Perez
    The document contains 3 journal entries: 1) Recording initial capital contributions by partners A and C on January 2, 2017 totaling $350,000 with A contributing $200,000 and C contributing $100,000. 2) Recording admission of new partner B on January 2, 2018 with a capital contribution of $175,000 which increases A and C's capital by $49,075 and $48,075 respectively. 3) Preparing a schedule of partner capital accounts as of January 31, 2020 showing the balances for partners A, B, and C after contributions, loans, earnings/losses, and the total capital balance of $260,000.

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    © All Rights Reserved
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    1. Prepare a journal entry to record the contribution of the partners on January 2, 2017.

    Date Accounts Debit Credit

    Jan 2 Cash
    P100,000.00

    Inventory
    P10,000.00

    Equipment
    P240,000.00
    Mortgage Payable
    P50,000.00

    A, Capital (250k-50k)
    P200,000.00

    C, Capital P100,000.00

    2. Prepare journal entry to record the admission of B to the partnership.

    Date Debit Credit

    Jan 2, 2018 Cash


    P175,000.00
    B, Capital
    P78,850.00

    C, Capital (50% x 96,150)


    P48,075.00

    A, Capital (50% x 96,150)


    P49,075.00
    To record admission

    3. Prepare a schedule of safe payments as of January 31, 2020.

    C 30% A 50% B 20% Total

    Capital P209,000.00 P415,000.00 P206,000.00 P830,000.00

    Loans (P50,000.00) (P50,000.00)

    Total Interest: P209,000.00 P365,000.00 P206,000.00 P780,000.00

    Unrealized OA (P156,000.00) (P260,000.00) (P104,000.00) (P520,000.00)


    (520,000)

    Balance P53,000.00 P105,000.00 P102,000.00 P260,000.00

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