Online Task No.

Deadline of Submission : FEB.16,FRIDAY 8:00PM

Instruction : On a separate sheet of paper, show your solutions and put your initials/signature
below each of your final answers. Take a photo of your papers alongside with your ID and
upload to GCLAMP.

Problem 1-1 Partner’s Original Investment

Archie Asio contributed land, inventory, and P280,000 cash to a partnership. The land has a
book value of P650,000 and a market value of P1,350,000. The inventory has a book value of
P600,000 and a market value of P510,000. The partnership also assumed a P350,000 note
payable owed by Asio that was used to purchase the land. El Queen Aytalin agreed to put up
cash equivalent to Asio’s net investment.

Required: Prepare the journal entry to record Asio’s and Aytalin’s investment in the
partnership.

Problem 1-2-Formation of Partnership

Grey, as her original investment in the firm of Grey and Mariano, contributed equipment that
had been recorded in the books of her own business as costing P 900, 000, with accumulated
depreciation of P 620, 000. The partners agreed on a valuation of P 400, 000. they also agreed
to accept Grey’s accounts receivable of P 360, 000, realizable to the extent of 85%.

Required: Prepare the journal entry to record Grey’s investment in the partnership.

Problem 1-3-Formation of Partnership

Villarin and Laurio have just formed a partnership. Villarin contributed cash of P 1,260,000 and
computer equipment that cost P 540,000. The fair value of the computer is P 360,000. Villarin
has notes payable on the computer of P 120,000 to be assumed by the partnership. Villarin is to
have a 60% capital interest in the partnership. Laurio contributed only P 900,000.

Required: a)Prepare the journal entry to record the partners’ investment in the
partnership.
b)Villarin should make an additional investment or (withdrawal) of?
Problem 1-4 (A Sole Proprietor and an Individual with no Business Form a Partnership)
On Feb 11, 2023, Banaag who has her own retail business and Galang, decided to form a
partnership wherein they will divide the profits in the ratio of 40:60, respectively. The statement
of financial position of Banaag is as follows:
Banaag Company
Statement of Financial Position
Feb 11, 2023

Assets
Cash 4,000
Accounts Receivables 160,000
Less: Allow. for Bad Debts 16,000 144,000
Inventory 200,000
Equipment 50,000
Less: Acc. Depreciation 10,000 40,000
Total Assets 388,000

Liabilities and Equity

Accounts Payable 36,000
Banaag, Capital 352,000
Total Liabilities and Equity 388,000

Conditions agreed upon before the formation of the partnership:

a. The accounts receivable of Banaag is estimated to be 70% realizable.
b. The accumulated depreciation of the equipment will be increased by P 10,000.
c. The accounts payable will be assumed by the partnership.
d. The capital of the partnership is based on the adjusted capital balance of Banaag. Galang
is to contribute cash in order to make the partner’s capital balances proportionate to the
profit and loss ratio.

Required:
1. Prepare the necessary journal entries in all the books to record the formation of the
partnership if a new set of books will be used.
2. Prepare the statement of financial position of the partnership.
Problem 1-5 (Two Sole Proprietors Form a Partnership)