AGUILAR AND ANGELES FORM A PARTNERSHIP WHEREIN AGUILAR

IS TO CONTRIBUTE CASH WHILE ANGELES IS TO TRANSFER THE ASSETS

AND LIABILITIES OF HIS BUSINESS. THE ACCOUNT BALANCES ON THE
BOOKS OF ANGELES ARE AS FOLLOWS:

CASH 300,000.00
ACCOUNT RECEIVABLE 450,000.00
INVENTORIES 240,000.00
ACCOUNTS PAYABLE 90,000.00
ANGELES, CAPITAL 900,000.00

THE PARTNERS AGREED ON THE FOLLOWING:

1. AN ALLOWANCE FOR DOUBTFUL ACCOUNTS OF P22,000 IS TO BE ESTABLISHED.

2. THE INVENTORIES ARE TO BE VALUED AT THEIR CURRENT REPLACEMENT COST OF P270,000
3. PREPAID EXPENSES OF P12,000 AND ACCRUED EXPENSES OF P5,000 ARE TO BE RECOGNIZED.
4. ANGELES IS TO BE CREDITED FOR AN AMOUNT EQUAL TO THE NET ASSETS TRANSFERRED.
5. AGUILAR IS TO CONTRIBUTE SUFFICIENT CASH TO HAVE AN EQUAL INTEREST IN THE PARTNERSHIP.

PARTNERSHIP WILL USE THE BOOKS OF ANGELES

TO ADJUST THE BOOKS OF ANGELES:

A. ANGELES CAPITAL 22,000.00

ALLOWANCE FOR DOUBTFUL ACCOUNTS 22,000.00

B. INVENTORIES 30,000.00
ANGELES CAPITAL 30,000.00

C. PREPAID EXPENSES 12,000.00

ACCRUED EXPENSE OR EXPENSE PAYABLE 5,000.00
ANGELES, CAPITAL 7,000.00

TO RECORD THE INVESTMENT OF AGUILAR

* CASH 915,000.00
AGUILAR, CAPITAL 915,000.00

* ANGELES CAPITAL 900,000.00

ALLOWANCE - 22,000.00
INVENTORIES 30,000.00
PREPAID AND ACCRUED EXP 7,000.00
ADJUSTED CAPITAL 915,000.00

PARTNERSHIP WILL USE NEW SET OF BOOKS

TO RECORD THE INVESTMENT OF ANGELES:

* CASH 300,000.00
ACCOUNTS RECEIVABLE 450,000.00
INVENTORIES 270,000.00
PREPAID EXPENSES 12,000.00
ACCOUNTS PAYABLE 90,000.00
ALLOW. FOR DOUBTFUL ACCOUNTS 22,000.00
EXPENSE PAYABLE 5,000.00
ANGELES, CAPITAL 915,000.00

* CASH 915,000.00
AGUILAR, CAPITAL 915,000.00

ADJUST AND CLOSE THE BOOKS OF ANGELES

TO ADJUST THE BOOKS OF ANGELES

A. ANGELES CAPITAL 22,000.00
ALLOWANCE FOR DOUBTFUL ACCOUNTS 22,000.00

B. INVENTORIES 30,000.00
ANGELES CAPITAL 30,000.00

C. PREPAID EXPENSES 12,000.00

ACCRUED EXPENSE OR EXPENSE PAYABLE 5,000.00
ANGELES, CAPITAL 7,000.00

TO CLOSE THE BOOKS OF ANGELES:

ANGELES, CAPITAL 915,000.00

ACCOUNTS PAYABLE 90,000.00
EXPENSE PAYABLE 5,000.00
ALLOWANCE FOR DOUBTFUL ACCOUNTS 22,000.00
CASH 300,000.00
ACCOUNTS RECEIVABLE 450,000.00
INVENTORIES 270,000.00
PREPAID EXPENSE 12,000.00

EQUIPMENT COST 50,000.00

ACC. DEPRECIATION 10,000.00
BOOK VALUE 40,000.00

* ACC. DEPRECIATION 10,000.00

 X, CAPITAL 10,000.00
EQUIPMENT 20,000.00

Another example
PARTNER C INVESTED THE FOLLOWING
DR CR
CASH 60,000.00
ACCOUNTS RECEIVABLE 120,000.00
FURNITURE 75,000.00
ACC. DPRECIAITON 15,000.00
ACCOUNTS PAYABLE 20,000.00

C, CAPITAL 10,000.00
ACCOUNTS RECEIVABLE 10,000.00

ACC. DEPRECIATION 15,000.00 COST

C, CAPITAL 10,000.00 ACC. DEPRN
FURNITURE 25,000.00 BOOK VALUE
 IF THE PARTNERSHIP WILL USE THE BOOKS OF THE PROPRIETOR, THE FF PROCEDURES
SHOULD BE FOLLOWED

* ADJUST THE BOOKS OF THE SOLE PROPRIETOR TO BRING THE ACCOUNT TO AGREED VALUES
* RECORD THE INVESTMENT OF THE OTHER PARTNER

IF THE PARTNERSHIP WILL USE A NEW SET OF BOOKS:

* RECORD THE INVESTMENT OF THE PARTNERS AT THEIR AGREED VALUE

* ADJUST AND CLOSE THE BOOKS OF THE SOLE PROPRIETOR

PARTNERSHIP.

COMPOUND ENTRY

* INVENTORIES 30,000.00
PREPAID EXPENSES 12,000.00
ACCRUED EXPENSE OR EXPENSE PAYABLE 5,000.00
ALLOW. FOR DOUBTFUL ACCOUNTS 22,000.00
ANGELES CAPITAL 15,000.00

900,000.00 + 15,000.00 915,000.00

ANGELES, CAPITAL
22,000.00 900,000.00
30,000.00
7,000.00
22,000.00 937,000.00
915,000.00 BALANCE

ANGELES AND AGUILAR

STATEMENT OF FINANCIAL POSITION
 JANUARY 1, 2022

ASSETS
CASH 1,215,000.00
ACCOUNTS RECEIVABLE 450,000.00
ALLOWANCE FOR DOUBTFUL ACCOUNTS 22,000.00 428,000.00
INVENTORIES 270,000.00
PREPAID EXPENSES 12,000.00
TOTAL ASSETS 1,925,000.00

LIABILITIES AND PARTNERS' EQUITY

ACCOUNTS PAYABLE 90,000.00
EXPENSE PAYABLE 5,000.00
ANGELES, CAPITAL 915,000.00
AGUILAR, CAPITAL 915,000.00
TOTAL LIABILITIES AND PARTNERS' EQUITY 1,925,000.00

AGREED VALUE
30,000.00
EQUIPMENT
50,000.00 20,000.00

BAL. 30,000.00
 ACCUMULATED DEPRECIAITON
10,000.00 10,000.00

AGREED VALUE

110,000.00
50,000.00

75,000.00
ACC. DEPRN 15,000.00
BOOK VALUE 60,000.00 AGREED VALUE 50,000.00
ROCEDURES

O AGREED VALUES
PEPE AND PILAR HAVE DECIDED TO FORM A PARTNERTSHIP

PEPE- PROPRIETOR AGREED

VALUATION
CASH 450,000.00
ACCOUNTS RECEIVABLE 180,000.00
ALLOW. FOR BAD DEBTS 15,000.00 10,000.00
MERCHANDISE INVTY 300,000.00 270,000.00
EQUIPMENT 180,000.00 125,000.00
ACCUMULATED DEPRECIATION 30,000.00
ACCOUNTS PAYABLE 105,000.00
NOTES PAYABLE 90,000.00
PEPE, CAPITAL 870,000.00

THE PARTNERSHIP WILL USE THE BOOKS OF PEPE

TO ADJUST THE BOOKS OF PEPE:

A. ALLOW. FOR BAD DEBTS 5,000.00

PEPE, CAPITAL 5,000.00

B. PEPE, CAPITAL 30,000.00

MERCHANDISE INVENTORY 30,000.00

C. ACCUMULATED DEPRECIATION 30,000.00

PEPE, CAPITAL 25,000.00
EQUIPMENT 55,000.00

PILAR WILL INVEST SUFFICIENT CASH TO GET 1/3 INTEREST IN THE PARTNERSHIP

PILAR 1/3 410,000.00

PEPE 2/3 820,000.00
total interest 3/3 1,230,000.00

CASH 410,000.00
PILAR, CAPITAL 410,000.00

B. NEW SET OF BOOKS FOR THE PARTNERSHIP

TO RECORD THE INVESTMENT OF THE 2 PARTNERS:

CASH 450,000.00 860,000.00

ACCOUNTS RECEIVABLE 180,000.00
MERCHANDISE INVTY 270,000.00
EQUIPMENT 125,000.00
ACCOUNTS PAYABLE 105,000.00
NOTES PAYABLE 90,000.00
 ALLOW. FOR BAD DEBTS 10,000.00
PEPE, CAPITAL 820,000.00
PILAR, CAPITAL 410,000.00
CASH 410,000.00
PILAR, CAPITAL 410,000.00

BOOKS OF PEPE
TO ADJUST THE BOOKS OF PEPE:

A. ALLOW. FOR BAD DEBTS 5,000.00

PEPE, CAPITAL 5,000.00

B. PEPE, CAPITAL 30,000.00

MERCHANDISE INVENTORY 30,000.00

C. ACCUMULATED DEPRECIATION 30,000.00

PEPE, CAPITAL 25,000.00
EQUIPMENT 55,000.00

TO CLOSE THE BOOKS OF PEPE fair value na

ACCOUNTS PAYABLE 105,000.00

NOTES PAYABLE 90,000.00
ALLOW. FOR BAD DEBTS 10,000.00
PEPE, CAPITAL 820,000.00
CASH 450,000.00
ACCOUNTS RECEIVABLE 180,000.00
MERCHANDISE INVTY 270,000.00
EQUIPMENT 125,000.00
 55,000.00

PEPE, CAPITAL
30,000.00 870,000.00
25,000.00 5,000.00

55,000.00 875,000.00

BALANCE 820,000.00

COST 180,000.00
ACC. DPRN 30,000.00
BV 150,000.00 FMV 125,000.00

EQUIPMENT
180,000.00 AE 55,000.00

BAL. 125,000.00

DR TOTAL ###
CR TOTAL 205,000.00
DIFFERENCE 820,000.00
25,000.00 CAPITAL
ABADA ALBANO
AGREED VALUE