LEARNING TASK NO.

1
GENERAL INSTRUCTION: Write your solution and answer on a separate paper and put
initials/signature on every final answer.
Problem # 1
Pedro and Jose form a partnership for the first time. Their investments are; Pedro is to invest cash amounting to P 70,
000 and Jose is to contribute Merchandise inventory at a P 10,000 cost with fair value of P 20, 000 and Computer
equipment at a cost of P 50, 000 with a fair value of P 30, 000.

Required:
Prepare the necessary journal entries to record the investment of each partner.

Problem #2
Jose has been operating a retail store for a number of years. A statement of financial position on July 1, 2021 is
prepared for Jose Company as follows:

Assets
Cash P 60, 000
Accounts receivable 50, 000
Inventory 70, 000
Equipment P 40, 000
Less: Accumulated Depreciation 4, 000 36, 000
Total Assets P 216, 000

Liabilities and Equity

Accounts payable P 86, 000
Jose Capital 130, 000
Total Liabilities and Equity P 216, 000

Jose needs additional capital to meet the increasing sales and offers Pedro and Interest in the business. Jose and Pedro
agree to form a partnership to be known as JP Partnership; Jose’s business is audited and its net assets are appraised.
The audit and appraisal shows the following:

1. Allowance for bad debts of P 5,000 is to be provided.

2. Inventory is to be recorded at its fair market value of P 80, 000.
3. The equipment is to be valued at 35, 000
4. P 2, 000 of accounts payable has not been recorded.

On July 1, 2021 Pedro contribute P 100, 000 cash for a one-third capital interest. The JP Partnership is to acquire all
of Jose’s business and assume its liabilities.

Required:
Prepare the necessary journal entries to record the formation of the partnership.
Problem #3
On June 30, 2021 Gerry and Henry, competitors in business, decide to consolidate their business to form a partnership
to be called GH Partnership. The statement of financial position of Gerry and Henry on this date are presented below:

Gerry Company
Statement of Financial Position
June 30, 2021

Assets
Cash P 5, 000
Accounts receivable 10, 000
Merchandise inventory 8, 000
Furniture and Fixtures 6, 000
Total Assets P 29, 000

Liabilities and Equity

Accounts payable P 3, 000
Gerry Capital 26, 000
Total Liabilities and Equity P 29, 000

Henry Company
Statement of Financial Position
June 30, 2021

Assets
Cash P 4, 000
Accounts receivable 8, 000
Merchandise inventory 10, 000
Furniture and Fixtures 9, 000
Total Assets P 31, 000

Liabilities and Equity

Accounts payable P 6, 000
Henry Capital 25, 000
Total Liabilities and Equity P 31, 000

The conditions agreed by the partners for purposes of determining their interests in the partnership are presented
below:
a. 10% of accounts receivable is to be set up as uncollectible in each book.
b. Merchandise inventory of Henry is to be increased by P 1, 000.
c. The furniture and fixtures of Gerry and Henry are to be depreciated by P 600 and P 900 respectively.

Required:
Prepare the necessary journal entries to record the formation of the partnership.
Problem #4
Froilan Labausa contributed land, inventory and P 280,000 cash to a partnership. The land has a book value of P 650,
000 and a market value of P 1,350,000. The inventory has a book value of P 600,000 and a market value of P 510,000.
The partnership also assumed a P 350,000 note payable owed by Labausa that was used to purchase the land. Rosalie
Balhag agreed to put up cash equivalent to Labausa’s net investment.

REQUIRED: prepare the journal entry to record Labausa’s and Balahag’s investment in the partnership.

Problem #5
Sabio, as her original investment in the firm of Sabio 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 Sabio’s accounts receivable of P 360, 000, realizable to the
extent of 85%.

REQUIRED: Prepare the journal entry to record Sabio’s investment in the partnership.

Problem #6
Gogola and Paglinawan have just formed a partnership. Gogola 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. Gogola has notes payable on the computer
of P 120,000 to be assumed by the partnership. Gogola is to have a 60% capital interest in the partnership. Paglinawan
contributed only P 900,000. The partners agreed to share profits and loss equally.

Gogola should make an additional investment or (withdrawal) of?