Fish R Us Practice Problem PDF

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Summary

A Sole Proprietor and an Individual with NO Business Form a PartnershipEspanol Operated a specialty shop that sold fishing equipment and accessories. post-closing trial balance on Dec. 31, 2007 is as follows:Debit Credit Cash 36, Accounts Receivable 150,Allowance for Uncollectible Accounts 16, Inven...

Description

A Sole Proprietor and an Individual with NO Business Form a Partnership  Espanol Operated a specialty shop that sold fishing equipment and accessories. post-closing trial balance o  Fish R Us Post-Closing Trial Balance Dec. 31, 2007 Debit Credit Cash 36,000 Accounts Receivable 150,000 Allowance for Uncollectible Accounts Inventory Equipment Accumulated Depreciation Accounts Payable Espanol, Capital

16,000 440,000 135,000

761,000

75,000 30,000 640,000 761,000

 Espanol plans to enter into a partnership with trusted associate, Quino, effective Jan. 1, 2008. Profits or losses will be shared equally. Espanol is to transfer all assets and liabilities of her shop to the partnership after revaluation.  Quino will invest cash equal to Espanol’s investment after revaluation. The agreed values are as follows: accounts receivable (net), P140,000; inventory, P460,000; equipment (net), P124,000. The partnership will operate under the business name of Fish R Us  Required: 1 Prepare the opening journal entries in the books of the partnership. 2 Prepare the partnership’s statement of financial position as at the date of formation of the partnership.

on Dec. 31, 2007 is as follows:

Fish R Us General Journal Book of Partnerships For the Month of January in the Year 2008 ACCOUNT TITLES AND EXPLANATION

DATE Jan-01 Cash Accounts Receivable Allowance for Uncollectible Accounts Inventory Equipment Accounts Payable Espanol, Capital To record the investments made by Espanol Jan-01 Cash Quino, Capital To record the investments made by Quino

PR

DEBIT 36,000 150,000

CREDIT

16,000 440,000 135,000 75,000 640,000

730,000 730,000

Adjustment of Accounts ACCOUNT TITLES Cash Accounts Receivable Allowance for Uncollectible Accounts Inventory Equipment Accumulated Depreciation Accounts Payable Espanol, Capital

PR

UNADJUSTED 36,000 150,000 16,000 440,000 135,000 75,000 30,000 640,000

NOTE: Cash to be invested by Quino is equal to Espanol's Capital.

ADJUSTED 36,000 150,000 10,000 460,000 124,000 30,000 730,000

Fish R Us Statement of Financial Position Book of Partnerships For the month of January in the year 2008 ACCOUNT TITLES PR Assets Current Assets Cash Accounts Receivable Less: Allowance for Uncollectible Accounts Inventory Total Current Assets Non-Current Assets Equipment Total Assets Liabilities Current Liabilities Accounts Payable Total Liabilities Owner's Equity Espanol, Capital Quino, Capital Total Liabilities and Owner's Equity

766,000 150000 -10,000

140,000 460,000

124,000

30,000

1,366,000

1,490,000

30,000

730,000 730,000 1,490,000...