Quiz #2
BSOA
Partnership Formation
Partnership & Corporation Accounting
NAME:______________________________ Ishgar,
650,000
Capital
Problem 1 To record the investments of
On March 1, 2023, Ishgar and Alvarez formed partners.
AI partnership with each contributing the
following assets:
COURSE, YEAR & SECTION:_____________
Ishgar Alvarez
Cash ₱300,000 ₱700,000 Problem 2
Machinery and Eapanol operated a specialty shop that sold
250,000 750,000 fishing equipment and accessories. Her post-
Equipment
Building - 2,250,000 closing trial balance on Dec. 31, 2013 is as
Furniture & Fixtures 100,000 - follows:
Fishda
The building is subject to a mortgage loan of Post-Closing Trial Balance
P80,000, which is to be assumed by the December 31, 2023
partnership agreement provides that Ishgar
and Alvarez share profits and losses 30% and Debit Credit
70%, respectively. Cash ₱36,000
Accounts Receivable 150,000
Required: Allowance for Doubtful ₱16,000
1. On March 1, 2023, how much is the Accounts
balance of Alvarez’s capital account? Inventory 440,000
2. On March 1, 2023, how much is the Equipment 60,000
total capital of the partnership? Accounts Payable 30,000
3. On March 1, 2023, how much is the Espanol, Capital 640,000
total assets of the partnership? Total P686,000 ₱686,000
4. Prepare the entry to record the
formation of AI partnership. Espanol and Quino agreed to form a
partnership. Quino is to invest cash equal to
ANSWERS: Espanol’s investment after revaluation. The
1. Alvarez Capital agreed values are as follows: accounts
Cash ₱700,000 receivable (net), 140,000; inventory,
Machinery and Equipment 750,000 460,000; and equipment, 124,000.
Building 2,250,000
Mortgage Payable (80,000) Required:
1. Prepare the necessary journal entries
Total ₱3,620,000 in the books of Espanol and in the
partnership books to record the
2. Total Partnership Capital partnership formation.
2. Compute the total assets after
Alvarez Ishgar Total
partnership formation.
Cash ₱700,000 ₱300,000 ₱1,000,000
3. Compute the total liabilities after
Machinery
partnership formation.
and 750,000 250,000 1,000,000
4. Compute the total equity after
Equipment
partnership formation.
Building 2,250,000 - 2,250,000
5. How much is the contribution of
Furniture
Quino?
and - 100,000 100,000
Fixtures
Mortgage ANSWERS:
(80,000) - (80,000)
Payable 1. Journal Entries
Total ₱3,620,000 ₱650,000 ₱4,170,000 Books of Espanol
2023 Debit Credit
3. Total Partnership Assets 12/31 Allowance
for Doubtful 16,000
Alvarez Ishgar Total Accounts
Inventory 20,000
Cash ₱700,000 ₱300,000 ₱1,000,000 Equipment 64,000
Machinery Accounts
and 750,000 250,000 1,000,000 10,000
Receivable
Equipment Espanol,
Building 2,250,000 - 2,250,000 90,000
Capital
Furniture To adjust the accounts.
and - 100,000 100,000
Fixtures Accounts
Total ₱3,700,000 ₱650,000 ₱4,350,000 30,000
Payable
Espanol,
730,000
Capital
4. Journal Entry
Cash 36,000
2023 Debit Credit
Accounts
03/1 Cash 1,000,000 140,000
Receivable
Machinery and
1,000,000 Inventory 460,000
Equipment
Equipment 124,000
Building 2,250,000
To close the books.
Furniture and
100,000
Fixtures
Mortgage Books of Partnership
80,000 2023 Debit Credit
Payable
Alvarez, 12/31 Cash 36,000
3,620,000 Accounts 140,000
Capital
AY 2023-2024, 2nd Semester Prof. NEKO
G. TEJONES, MSA-MA, CPA
BSA 2
2
Income Taxation
Receivable
Inventory 460,000
Equipment 124,000
Accounts
30,000
Payable
Espanol,
730,000
Capital
To record the investments of
Espanol.
Cash 730,000
Quino,
730,000
Capital
To record the investments of
Quino.
2. Total Partnership Assets
Espanol Quino Total
Cash ₱36,000 ₱730,000 ₱766,000
Accounts
140,000 - 140,000
Receivable
Inventory 460,000 - 460,000
Equipment 124,000 - 124,000
Total ₱760,000 ₱730,000 ₱1,490,000
3. Total Partnership Liability
Accounts Payable ₱30,000
4. Total Partnership Capital
Espanol Quino Total
Cash ₱36,000 ₱730,000 ₱736,000
Accounts
140,000 - 140,000
Receivable
Inventory 460,000 - 460,000
Equipment 124,000 - 124,000
Accounts
(30,000) - (30,000)
Payable
Total ₱730,000 ₱730,000 ₱1,460,000
5. Contribution of Quino
Note: Quino is to invest cash equal to
Espanol’s investment.
Espanol
Cash ₱36,000
Accounts
140,000
Receivable
Inventory 460,000
Equipment 124,000
Accounts Payable (30,000)
Investment of Espanol ₱730,000
AY 2023-2024, 2nd Semester Prof. NEKO
G. TEJONES, MSA-MA, CPA
