PARTNERSHIP FORMATION Exercises Answers
PARTNERSHIP FORMATION Exercises Answers
PARTNERSHIP FORMATION Exercises Answers
Answers
EXERCISE 1
ENTRIES:
Cash 400,000
Dorothy, Capital 400,000
MEMO: Spencer is admitted as an industrial partner with 20% share in partnership profits.
EXERCISE 2
ENTRIES:
a.) October 1,2019
Equipment 550,000
L. Paras, Capital 550,000
Cash 350,000
Land 1,050,000
Mortgage payable 200,000
M. Parayno, Capital 1,200,000
ENTRIES:
Assuming the partnership will not assume the mortgage payable on the land of M. Parayno.
b.) October 1,2019
Equipment 550,000
L. Paras, Capital 550,000
Cash 350,000
Land 1,050,000
M. Parayno, Capital 1,400,000
EXERCISE 3
ENTRIES:
Adjusting and closing entries:
a.) December 31,2019
J.Jay Capital 2,400
Allowance for bad debts 2,400
Assets
Cash P 653,000