[go: up one dir, main page]
Scribd
Upload
2K views11 pages

Chpter 1.problem 7.mulles

Mulles Fertilizer Supply and Lucena form a partnership. They agree to share profits and losses equally and invest equal capital amounts. Lucena contributes land worth PHP 500,000 and a building worth PHP 1,450,000. Adjustments are made to accounts receivable, inventory, prepaid rent, and accumulated depreciation. The books of Mulles Fertilizer Supply are closed and the assets and liabilities are transferred to the partnership books. Lucena contributes additional cash to match Mulles' capital contribution. The trial balance of the new partnership, Mulles and Lucena Storage and Supply, is presented.

Uploaded by

Kim Olimba
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
2K views11 pages

Chpter 1.problem 7.mulles

Mulles Fertilizer Supply and Lucena form a partnership. They agree to share profits and losses equally and invest equal capital amounts. Lucena contributes land worth PHP 500,000 and a building worth PHP 1,450,000. Adjustments are made to accounts receivable, inventory, prepaid rent, and accumulated depreciation. The books of Mulles Fertilizer Supply are closed and the assets and liabilities are transferred to the partnership books. Lucena contributes additional cash to match Mulles' capital contribution. The trial balance of the new partnership, Mulles and Lucena Storage and Supply, is presented.

Uploaded by

Kim Olimba
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
You are on page 1/ 11

Problem #7

A Sole Proprietor and an


Individual with No Business
Form a Partnership
Mulles Fertilizer Supply
Trial balance
July 30, 2011

Cash Php 229, 500


Accounts Receivable 2, 103, 000
Allowance for uncollectible Php 117, 000
accounts
Inventory 1, 012, 500
Prepaid Rent 29, 250
Store Equipment 390, 000
Accumulated Depreciation 97, 500
Notes Payable 330, 000
Accounts Payable 505, 500
Mulles and Lucena Storage and Sells
Mulles, Capital 2, 714, 250
Total Php 3, 764, 250 Php 3, 764, 250
 Agreements:

 They will share in profits and losses equally.


 They will invest equal amounts in the partnership.
 They both agreed that Lucena’s land is worth Php 500, 000 and
his building Php 1, 450, 000.
 Lucena is to contribute cash in an amount sufficient to make his
capital account balance equal to Mulles.
 The accounts receivable are to be valued at Php 1, 799, 000 and
the allowance for uncollectible accounts will be eliminated.

 Inventory is to be decreased by Php 112, 500

 The prepaid rent is for the warehouse used by Mulles. All


merchandise will be transferred to Lucena’s building. No refund
will be received on the unused rent paid in advance.

 The store equipment has a fair value of Php 300,000

 All other assets and liabilities are to be transferred at their book


values.
1. Record the adjustments
2, 103, 000 304,000
1, 799,ooo

a. Mulles, Capital Php 304, 000


Accounts Receivable Php 304, 000

Allowance for Uncollectible Accounts Php 117, 000


Mulles, Capital Php 117, 000

Store equipment, net per ledger -- Php 292, 500


b. Mulles, Capital Php 112, 500
Store equipment, net as agreed -- 300,ooo
Inventory Php 112, 500

c. Mulles, Capital Decrease in250


Php 29, accumulated de ( 7, 500)
Prepaid Rent Php 29, 250

d. Accumulated Depreciation Php 7, 500


Mulles, Capital Php 7,500

e. No entry ( the other assets and liabilities are not affected because there are no further adjustments
made)
Allowance for Uncollectible Accounts Php 117, 000
Accumulated Dep. 7, 500
Mulles, Capital 321, 250
Prepaid Rent 29, 250
Inventory 112, 500
Accounts Receivable 304, 000
2. Close the Books of Mulles Fertilizer Supply:

Accumulated Depreciation 90, 000


Notes Payable 330, 000
Accounts Payable 505,500
Mulles, Capital 2,393, 000
Cash 229, 500
Accounts Receivable 1, 799,000
Inventory 900,000
Store Equipment 390,000
2. Record the Investments – Books of Partnership
Mulles:

Cash 229, 500


Accounts Receivable 1, 799,000
Inventory 900,000
Store Equipment 300,000
Notes Payable 330, 000
Accounts Payable 505,500
Mulles, Capital 2,393, 000
Lucena:

Land 500,000
Building 1, 450,000
Cash 443, 000
Lucena, Capital 2, 393, 0oo
Mulles and Lucena Storage and Supply
Trial Balance

Cash Php 672, 500


Accounts Receivable 1, 799,000
Inventory 900,000
Store Equipment 300,000
Land 500,000
Building 1, 450,000
Notes Payable 330, 000
Accounts Payable 505,500
Mulles, Capital 2,393, 000
Lucena, Capital 2, 393, 0oo
Total Php 5, 621, 500 Php 5, 621, 500
End

You might also like