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    Lubi, Julie Marie Anne P Bsa-A1C Partnership Formation: Seatwork 1 and 2 Problem 1. - Partner's Capital and Drawing

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    Lizzeille Anne Amor Macalintal
    This document contains information about partnership transactions and journal entries related to partners' capital and drawing accounts, loans to and from partners, and initial capital contributions. It includes sample T-accounts and journal entries to record transactions in the partners' capital and drawing accounts, reclassify entries in the loans to and from partners account, and record the initial capital contributions based on an agreed percentage split between the two partners.

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    Lubi, Julie Marie Anne P Bsa-A1C Partnership Formation: Seatwork 1 and 2 Problem 1. - Partner's Capital and Drawing

    Uploaded by

    Lizzeille Anne Amor Macalintal
    149 views4 pages
    This document contains information about partnership transactions and journal entries related to partners' capital and drawing accounts, loans to and from partners, and initial capital contributions. It includes sample T-accounts and journal entries to record transactions in the partners' capital and drawing accounts, reclassify entries in the loans to and from partners account, and record the initial capital contributions based on an agreed percentage split between the two partners.

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    Partnership_Formation.docx

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    This document contains information about partnership transactions and journal entries related to partners' capital and drawing accounts, loans to and from partners, and initial capital contributions. It includes sample T-accounts and journal entries to record transactions in the partners' capital and drawing accounts, reclassify entries in the loans to and from partners account, and record the initial capital contributions based on an agreed percentage split between the two partners.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    149 views4 pages

    Lubi, Julie Marie Anne P Bsa-A1C Partnership Formation: Seatwork 1 and 2 Problem 1. - Partner's Capital and Drawing

    Uploaded by

    Lizzeille Anne Amor Macalintal
    This document contains information about partnership transactions and journal entries related to partners' capital and drawing accounts, loans to and from partners, and initial capital contributions. It includes sample T-accounts and journal entries to record transactions in the partners' capital and drawing accounts, reclassify entries in the loans to and from partners account, and record the initial capital contributions based on an agreed percentage split between the two partners.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    of 4

    Lubi, Julie Marie Anne P

    BSA-A1C

    Partnership Formation:
    Seatwork 1 and 2

    Problem 1. – Partner’s Capital and Drawing

    The Following transactions are shown in the records of A partner’s capital and drawing
    accounts.

    A. Capital
    1. Beginning balance, P 100,000
    2. Correction of understatement of prior year’s income, P10,000.
    3. Additional investment, P240,000
    B. Drawing
    1. Temporary withdrawals, P60,000
    2. Partnership debts paid by A, P90,000.
    3. Partnership claims collected and retained by A, P20,000
    The partnership has a debit income summary balance amounting to P150,000 of which 1/3 is
    the share of A.

    Required:

    A. 1. Cash P 100,000
    A, Capital P100,000
    To record the business’
    beginning balance.
    2. Cash P 10,000
    A, Capital P 10,000
    To record correction of
    understatement of prior
    year’s income.
    3. Cash P 240,000
    A, Capital P240,000
    To record additional
    investment to the business.

    1. Prepare the T-Accounts for A’s capital and T-accounts for A’s drawing.
    Determine their respective ending balances.

    Answer: Problem 1, No. 1

    A, Capital A, Drawing .
    P 100,000 P60,000 P 90,000
    10,000 20, 000
    240,000 P80,000 90,000
    P 350,000 P 10,000

    This study source was downloaded by 100000841671451 from CourseHero.com on 02-11-2022 02:13:28 GMT -06:00

    https://www.coursehero.com/file/58133830/Partnership-Formationdocx/
    2. Make the journal entries to close the income summary account and to close the drawing
    account.

    Answer: Problem 1, No. 2

    Closing Entries

    Closing Income Summary

    A’s Capital P 50,000.00


    Income Summary P 50,000.00
    To close the Income Summary
    account to the capital.

    Closing Drawings

    A’s Drawings P 10,000.00


    A’s Capital P 10,000.00
    To close the drawing account to the
    capital.

    Problem 2: Loans to and from Partners


    The loans to and from partners account of Cute and Tong Partnership shows the following
    ledger:
    Loans to and from Partners

    01/01 Cute 50,000 03/01 Tong 30,000


    08/30 Tong 20,000 05/30 Cute 60,000

    Required:
    Make the reclassifying journal entries if the partners agree to segregate the “loans to and from
    partner’s” account using the “loans to partner’s (each partners name) “loans from partner (each
    partner’s name).

    Answer Problem 2:

    Journal Entries

    Date Particulars Debit Credit

    01/01 Loans receivable from partner- Cute P 50,000


    Cash P 50,000
    To record payment of
    partner’s advances.

    03/01 Cash P 30,000


    Loans payable to partner- Tong P 30,000
    To record loans from Tong.

    05/30 Cash P 60,000


    Loans payable to partner- Cute P 60,000
    To record loans from Cute.

    This study source was downloaded by 100000841671451 from CourseHero.com on 02-11-2022 02:13:28 GMT -06:00

    https://www.coursehero.com/file/58133830/Partnership-Formationdocx/
    Date Particulars Debit Credit

    08/30 Loans receivable from partner- Tong P20,000


    Cash P20,000
    To record payment of
    partner’s advances.

    *Separated Loans to and Loans from


    Journal Entries

    Loans to Partners

    Date Particulars Debit Credit

    01/01 Loans receivable from partner- Cute P 50,000


    Cash P 50,000
    To record payment of
    partner’s advances.

    08/30 Loans receivable from partner- Tong P20,000


    Cash P20,000
    To record payment of
    partner’s advances.

    Loans from Partners

    Date Particulars Debit Credit

    03/01 Cash P 30,000


    Loans payable to partner- Tong P 30,000
    To record loans from Tong.

    05/30 Cash P 60,000


    Loans payable to partner- Cute P 60,000
    To record loans from Cute.

    Problem 3: Issues in Capital Contribution


    Mar and Ria agreed to form a partnership with a total agreed capital contribution of P500,000
    cash.
    Required:
    Make the Journal entries for the partner’s respective initial contribution to the partnership
    assuming that:

    The contribution would be 60% and 40% for Mar and Ria, respectively.

    Answer Problem 3:

    This study source was downloaded by 100000841671451 from CourseHero.com on 02-11-2022 02:13:28 GMT -06:00

    https://www.coursehero.com/file/58133830/Partnership-Formationdocx/
    Journal Entries

    1. There was no agreement as to how much would be the specific share of each partner.

    Date Items Debit Credit


    Cash P 250,000
    Mar, Capital P 250,000
    To record Mar’s initial
    contribution to the partnership.

    Cash P 250,000
    Ria, Capital P 250,000
    To record Ria’s initial
    contribution to the partnership.

    2. The contribution would be 60% and 40% for Mar and Ria, respectively.

    Date Items Debit Credit


    Cash P 300,000
    Mar, Capital P 300,000
    To record Mar’s initial
    contribution to the partnership.

    Cash P 200,000
    Ria, Capital P 200,000
    To record Mar’s initial
    contribution to the partnership

    This study source was downloaded by 100000841671451 from CourseHero.com on 02-11-2022 02:13:28 GMT -06:00

    https://www.coursehero.com/file/58133830/Partnership-Formationdocx/
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