A.
Requirement 1
a. Medina, Capital 4,750
Allowance for Doubtful Accounts 4,750
#
b. Medina, Capital 25,000
Merchandise Inventory 25,000
#
c. Accumulated Depreciation 90,000
Medina, Capital 90,000
#
d. Medina, Capital 60,000
Accrued Rental 60,000
#
e. Prepaid Expenses 25,000
Medina, Capital 25,000
#
Requirement 2
Medina, Capital
Adjustments: Beginning Balance 3,770,000
a. 4, 750
b. 25,000 c. 90,000
d. 60,000 e. 25,000
3,885,000
Capital balance after
Adjustments 3,795,250
Requirement 3
Mr. Loqueloque will contribute the amount 3,795,250.
Requirement 4
Allowance for Doubtful Accounts 9,750
Accumulated Depreciation 100,000
Accounts Payable 450,000
Accrued Rental 60,000
Medina Capital 3,795,250
Cash 1,050,000
Accounts Receivable 65,000
Merchandise Inventory 2,325,000
Prepaid Expenses 25,000
Store Equipment 950,000
To close the accounts of the sole proprietorship business of Medina.
Requirement 5
Cash 1,050,000
Accounts Receivable 65,000
Merchandise Inventory 2,325,000
Prepaid Expenses 25,000
Store Equipment 950,000
Allowance for Doubtful Accounts 9,750
Accumulated Depreciation 100,000
Accounts Payable 450,000
Accrued Rental 60,000
Medina Capital 3,795,250
To record the initial investment of Medina.
Cash 3,795,250
Loqueloque, Capital 3,795,250
To record the initial investment of Loqueloque.
Requirement 6
Medina and Loqueloque
Statement of Financial Position
As of December 31, 20A
ASSETS
Current Assets:
Cash 4,845,250
Accounts Receivable 65,000
Allowance for Doubtful Accounts 9,750 55,250
Merchandise Inventory 2,325,000
Prepaid Expenses 25,000
Total Current Assets 7,250,000
Non-Current Assets:
Store Equipment 950,000
Accumulated Depreciation 100,000 850,000
Total Assets 8,100,500
LIABILITIES AND PARTNER’S EQUITY
Accounts Payable 450,000
Accrued Rental 60,000 510,000
L. Medina, Capital 3,795,250
L. Loqueloque, Capital 3,795,250
Total Liabilities and Partner’s Equity 8,100,500
B.
Requirement 1
BOOKS OF GERON
a. Geron, Capital 20,000
Accounts Receivable 20,000
#
b. Geron, Capital 5,500
Inventories 5,500
#
c. Geron, Capital 2,000
Other Assets 2,000
#
BOOKS OF YUMOL
a. Yumol, Capital 35,000
Accounts Receivable 35,000
#
b. Yumol, Capital 6,700
Inventories 6,700
#
c. Yumol, Capital 3,600
Other Assets 3,600
#
Requirement 2
Geron, Capital
Adjustments: Beginning balance 641,976
a. 20,000
b. 5,500
c. 2,000 _______
27,500
Balance end 614,476
Yumol, Capital
Adj. a. 35,000 Beginning balance 728,352
b. 6,700
c 3,600
45,300 Balance End 683,052
Requirement 3
BOOKS OF GERON
Accounts Payable 178,940
Notes Payable 200,000
Geron, Capital 614,476
Cash 11,000
Accounts Receivable 214,536
Inventories 114,535
Land 603,000
Furniture and Fixtures 50,345
To close the books of Geron.
BOOKS OF YUMOL
Accounts Payable 243,650
Notes Payable 345,000
Yumol, Capital 683,052
Cash 22,354
Accounts Receivable 532,890
Inventories 253,402
Land 428,267
Furniture and Fixtures 34,789
To close the books of Yumol.
Requirement 4
BOOKS OF PARTNERSHIP
Cash 11,000
Accounts Receivable 214,536
Inventories 114,535
Land 603,000
Furniture and Fixtures 50,345
Accounts Payable 178,940
Notes Payable 200,000
Geron, Capital 614,476
To record initial investment of Geron.
Cash 22,345
Accounts Receivable 532,890
Inventories 253,402
Building 428,267
Furniture and Fixtures 34,789
Accounts Payable 243,650
Notes Payable 345,000
Yumol, Capital 683,052
To record initial investment of Yumol.
Requirement 5
GERON AND YUMOL
STATEMENT OF FINANCIAL POSITION
AS OF
ASSETS
Current Assets:
Cash 33,354
Accounts Receivable 747,426
Inventories 367,937
Total Current Assets 1,148,717
Non-Current Assets
Land 603,000
Building 428,267
Furniture and Fixtures 85,134
Total Assets 2,265,118
LIABILITIES AND PARTNER’S EQUITY
Accounts Payable 422,590
Notes Payable 545,000
Geron, Capital 614,476
Yumol, Capital 683,052
Total Liabilities and Partner’s Equity 2,265,118
