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Accounting Answer Key

The response provides the opening journal entries to close De Leon's books, record the adjustments to restate capital, and record the investments and assets/liabilities transferred to the partnership. It also includes the required partnership statement

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Mariel Kaye
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37 views3 pages

Accounting Answer Key

The response provides the opening journal entries to close De Leon's books, record the adjustments to restate capital, and record the investments and assets/liabilities transferred to the partnership. It also includes the required partnership statement

Uploaded by

Mariel Kaye
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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Northern Bukidnon State College

Quiz: Acctg. 2

Name: _______________________________________

De Leon operated a specialty shop that sold fishing equipment and accessories. His post-closing trial
balance on Dec. 31, 2021 is as follows:

Fish
Post-Closing Trial Balance
Dec. 31, 2021

Debit Credit

Cash 72,000

Accounts Receivable 300,000

Allowance for Uncollectible Accounts 32,000

Inventory 880,000

Equipment 270,000

Accumulated Depreciation 150,000

Accounts Payable 60,000

De Leon, Capital 1,280,000

1,522,000 1,522,000

De Leon plans to enter into a partnership with trusted associate, Melicor, effective Jan. 1, 2022.
Profits and losses will be shared equally. De Leon is to transfer all assets and liabilities of his shop to
the partnership after revaluation.

Melicor will invest cash equal to De Leon's investment after revaluation. The agreed values are as
follows: accounts receivable (net), 280,000; inventory 920,000 and equipment (net) 248,000. 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.
Northern Bukidnon State College

ANSWER:

Requirement #1: Prepare the opening journal entries in the books of the partnership.

Books of De Leon
Melicor's Inventory: 920,000
De Leon's Inventory: 880,000

Inventory 40,000
Accumulated Depreciation 128,000
Allowance for Uncollectible Accounts 12,000
De Leon, Capital 180,000
To record adjustments to restate De Leon’s capital.

Accounts Payable 60,000


Accumulated Depreciation 22,000
Allowance for Uncollectible Accounts 20,000
De Leon’s Capital 1,460,000
Cash 72,000
Accounts Receivable 300,000
Inventory 920,000
Equipment 270,000
To close the books of De Leon.

Books of the Partnership

Cash 72,000
Accounts Receivable 300,000
Inventory 920,000
Equipment 248,000
Accounts Payable 60,000
Allowance for Uncollectible Accounts 20,000
De Leon’s Capital 1,460,000
To record the Investment of De Leon.

Cash 1,460,000
Melicor’s Capital 1,460,000
To record the Investment of Melicor.
Northern Bukidnon State College

Requirement #2: Prepare the partnership's statement of financial position as at the date of formation of
the partnership.

Fish R’ Us
Statement of Financial Position
January 1, 2022

Assets

Cash 1,532,000
Accounts Receivable 300,000
Less: Allowance for Doubtful Accounts (20,000)
Inventory 920,000
Equipment 248,000
Total Assets 2,980,000

Liabilities & Owner’s Equity


Accounts Payable 60,000
De Leon, Capital 1,460,000
Melicor, Capital 1,460,000
Total Liabilities & Owner’s Equity 2,980,000

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