Submitted by: Sicangco, Salbibia, Teruel, Seva and Sembrano 1.2.3.

6 Allan and Irene

Books of Allan
Allan, Capital 2,250

Allowance for Doubtful Accounts 2,250

To record adjustments of Allowance for Doubtful Accounts

Allan, Capital 2,000

Accrued Expenses 2,000

To record adjustments of Accrued Expenses

Accumulated Depreciation 11,250

Allowance for Doubtful Accounts 2,250

Accrued Expenses 2,000

Accounts Payable 34,500

Allan, Capital 78,750

Cash 18,750

Accounts Receivable 45,000

Merchandise Inventory 40,000

Equipment 25,000

To close the books of Allan

Books of Irene
Merchandise Inventory 5,000

Irene, Capital 5,000

To record adjustments of Merchandise Inventory

Irene, Capital 1,875

Allowance for Doubtful Accounts 1,875

To record adjustments of Allowance for Doubtful Accounts

Goodwill 25,000

Cash 10,000

Irene, Capital 35,000

To record additional investments of Irene

 Allan and Irene

Statement of Financial Position

Books of Partnership

October 1, 2001

Assets

Cash P 40,000

Accounts Receivable P 82,500

Less: Allowance for Doubtful Accounts 4,125 78,375

Inventory 75,000

Equipment 40,000

Goodwill 25,000

Total Assets P 258,375

Liabilities

Accounts Payable P 59,500

Accrued Expenses 2,000

Owner’s Equity

Allan, Capital P 78,750

Irene, Capital P 118,125

Total Liabilities and OE P 258,375