ACTIVITY 1

1. On August 1, 2021, Meme and Youyou decided to form a partnership called as MeYou
Partnership. Their operation will focus on retail of dry goods. They decided that Meme will
contribute Land worth P1,000,000.00 and an Office Equipment with a fair market value of
P400,000.00. Youyou will contribute cash of P900,000 and a delivery truck worth P550,000. The
land has a mortgage value amounting to P100,000.00.

Requirements:

a. Record the investment of Meme and Youyou to the partnership if liability is assumed.
b. Record the investment of Meme and Youyou to the partnership if liability is not assumed.
c. Prepare Statement of Financial position of MeYou Partnership after formation.

2. On August 1, 2021, Meme, a sole proprietorship, and Youyou decided to form a partnership
called as MeYou Partnership. Their operation will focus on retail of dry goods. They decided that
Youyou will contribute Land worth P1,000,000.00 and a cash of P900,000.

Meme’s Statement of Financial Position on August 1, 2021 before adjustments are as follow:

Cash P50,000 Accounts Payable P150,000

Accounts Receivable 150,000 Loans Payable 20,000

Allowance for Doubtful Accounts (10,000) Meme’s Capital 165,000

Merchandise Inventory 20,000 Total Liabilities
Office Supplies 15,000 and Capital P335,000
Office Equipment 140,000
Accumulated-Depreciation (30,000)
Total Assets P335,000

The following are adjustments on Meme’s books prior to partnership formation.

1. Allowance for doubtful accounts is increased to 10% of the Accounts Receivable
2. An accrued rent income should be recognized worth P5,000
3. Prepaid Taxes worth P2,500 are to be recognized.
4. Office supplies worth P5,000 were unused.

Requirements:

a. Record adjusting entries on Meme’s books.

b. Prepare Statement of Financial Position of Meme after adjustment.
c. Prepare Journal entry to close Meme’s books
d. Record the investment of Meme and Youyou on the partnership.