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Problem #10 Two Sole Proprietorship Form A Partnership

Two sole proprietorships, owned by Apalisoc and Tuddao, formed a partnership on October 31, 2018. To record the partnership formation, the individual statements of financial position of Apalisoc and Tuddao were combined. The partnership's statement of financial position as of October 31, 2018 showed total assets of $3,002,000, total liabilities of $1,327,000, and capital accounts of $926,000 for Apalisoc and $963,000 for Tuddao.

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15K views2 pages

Problem #10 Two Sole Proprietorship Form A Partnership

Two sole proprietorships, owned by Apalisoc and Tuddao, formed a partnership on October 31, 2018. To record the partnership formation, the individual statements of financial position of Apalisoc and Tuddao were combined. The partnership's statement of financial position as of October 31, 2018 showed total assets of $3,002,000, total liabilities of $1,327,000, and capital accounts of $926,000 for Apalisoc and $963,000 for Tuddao.

Uploaded by

studentone
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© © All Rights Reserved
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Problem #10

Two Sole Proprietorship Form a Partnership

On Oct 31, 2018, Apalisoc and Tuddao agreed to combine their proprietorship as a partnership. Their statements of
financial position are as follows:

Apalisoc’s Business Tuddao’s Business

Assets Book Value Current Market Value Book Value Current Market Value
Cash P37000 P37000 P80000 P80000
Accounts Receivable (net) 220000 202000 80000 63000
Inventory 510000 460000 340000 351000
Property and Equipment (net) 1218000 1235000 535000 574000
Total Assets
Liabilities and Capital
Accounts Payable P236000 P236000 P91000 P91000
Accrued Expenses 22000 22000 14000 14000
Notes Payable 750000 750000 - -
Apalisoc, Capital 977000 - - -
Tuddao, Capital - - 930000 -
Total Liabilities and Capital P1985000 P1934000 P1035000 P1068000
Required:
1. Record the partnership formation.
2. Prepare the partnership’s statement of financial position as at Oct 31, 2018.
1.
*Apalisoc
Cash 37000
Accounts Receivable 202000
Inventory 460000
Property and Equipment 1235000
Accounts Payable 236000
Accrued Expenses 22000
Notes Payable 750000
Apalisoc, Capital 926000
*Tuddao
Cash 80000
Accounts Receivable (net) 63000
Inventory 351000
Property and Equipment (net) 574000
Accounts Payable 91000
Accrued Expenses 14000
Tuddao, Capital 963000
Apalisoc and Tuddao
Statement of Financial Position
Oct 31, 2018
Assets
Cash P117000
Accounts Receivable 265000
Inventory 811000
Property and Equipment 1809000
Total Assets P3002000
Liabilities and Capital
Accounts Payable P327000
Accrued Expenses 36000
Notes Payable 750000
Apalisoc, Capital 926000
Tuddao, Capital 963000
Total Liabilities and Capital P3002000

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