Instructions: Please submit your answers with corresponding solutions to the case problems below: (5 points each)

1. Marcial and Juan formed a partnership. Marcial contributed a building that he purchased 5 years ago for
P100,000. The accumulated depreciation on the building on the date of formation of the partnership is
P25,000 and the fair value is P125,000. For what amount will Marcial’s capital account be credited on the
books of the partnership?

2-6. Tom admits Tubo to a partnership interest in his business. The following account balances of Tubo on January 1,
2022 show:

Cash
Merchandise Inventory
Accounts receivable
Equipment, net
Accounts Payable
Tubo, Capital
It is agreed that the following adjustments shall be made prior to the admission of Tubo:
1. Provide 2% allowance for uncollectible accounts.
2. Fair market values of the merchandise inventory and equipment are P100,000 and P50,000, respectively.
3. Other assets amounting to P5,000 are to be recognized.
4. Accrued expenses of P2,000 are to be recognized.
5. Liabilities are to be assumed by the partnership.
5. Profit and loss of Tom and Tubo shall be divided in the ratio of 2:1.
Tubo is to invest sufficient cash equivalent to 30% in the partnership.
Required: 2. What is the net (debit) credit adjustment of Tubo, capital?
3. How much is the total liabilities of Tubo before the formation of the partnership?
4. How much is the total capital of Tom before the formation of the partnership?
5. How much is the cash contributed by Tubo in the formation of a partnership?
6. How much is the total assets after the formation of the partnership?

7-9. Liscano and Veroy executed a partnership agreement that lists the following assets contributed at the
partnership formation. Liscano contributed cash of P 200,000 and furniture and fixtures with carrying cost of
P150,000, fair market value of P160,000 and acquisition cost of P200,000. Veroy contributed cash of P100,000,
Inventory of P50,000 and Building of P250,000. The building is subject to a mortgage of P50,000, which the
partnership has assumed.
Required: 7. What amount should be recorded as capital for Liscano and Veroy at the formation of the partnership?
8. What amount should be recorded as total assets of the partnership?
9. What amount should be recorded as total liabilities of the partnership?

10. See and Cinco formed a partnership. See contributed a building that she purchased 10 years ago for
P100,000. The accumulated depreciation on the building on the date of formation of the partnership is
P25,000 and the fair value is P150,000.
ow: (5 points each)

10,000.00
90,000.00
30,000.00
70,000.00
50,000.00
150,000.00
 1. Marcial and Juan formed a partnership. Marcial contributed
a building that he purchased 5 years ago for P100,000. The
accumulated depreciation on the building on the date of
formation of the partnership is P25,000 and the fair value is
P125,000. For what amount will Marcial’s capital account be
credited on the books of the partnership?

Adjusting entries
Accumulated Depreciation 25,000
Marcial's Capital 25,000

Marcial's Capital (Initial) 100,000

Marcial's Capital (End) 75,000

2-6. Tom admits Tubo to a partnership interest in his business.

The following account balances of Tubo on January 1, 2022
show:
Cash 10,000.00
Merchandise Inventory 90,000.00
Accounts receivable 30,000.00
Equipment, net 70,000.00
Accounts Payable 50,000.00
Tubo, Capital 150,000

Adjusting Entries:
1 Tubo, Capital 600
Allowance for Uncollectible accounts 600

2 Merchandise Inventory 10,000

Tubo, Capital 10,000

Tubo, Capital 20,000

Accumulated Depreciation-Equipment 20,000

3 Other Assets 5,000

Tubo, Capital 5,000

4 Tubo, Capital 2,000

Accrued Expense 2,000

5 Tom, Capital *2/1 284800

Tubo, Capital *1/2 142,400
Partnership Capital 427,200
Question 2: Tubo, Capital
600 10,000
20,000 5,000
2,000

7,600 150,000

142,400

Question 3:
Accounts Payable 50,000.00
Tubo, Capital 150,000
Total Liabilities 200,000.00 Tubo's total liabilities before formatio

Question 4:
Tom, Capital (*1/2) 142,400 Tom's Capital before formation

Question 5:
Cash 10,000.00 Tubo's Cash contribution to the partn

Question 6:
Cash 10,000
Merchandise Inventory 100,000
Accounts receivable 29,400
Equipment, net 50,000
Other Assets 5,000
Total Assets 194,400 Total Assets after formation

7-9. Liscano and Veroy executed a partnership agreement that

lists the following assets contributed at the partnership
formation. Liscano contributed cash of P 200,000 and
furniture and fixtures with carrying cost of P150,000, fair
market value of P160,000 and acquisition cost of P200,000.
Veroy contributed cash of P100,000, Inventory of P50,000
and Building of P250,000. The building is subject to a
mortgage of P50,000, which the partnership has assumed.
Required: 7. What amount should be recorded as capital for Liscano and Veroy at the formation of the partnership?
8. What amount should be recorded as total assets of the partnership?
9. What amount should be recorded as total liabilities of the partnership?

Liscano's Book
Cash 200,000
Furnitures and fixtures 160,000

Veroy's Book
Cash 100,000
Inventory 50,000
Building 250,000

Adjustments:
Veroy, capital 50,000
Mortgage Payable 50,000

New Partnership Book

Cash 300,000
Furnitures and fixtures 160,000
Inventory 50,000
Building 250,000
Mortgage Payable 50,000
Liscano, Capital 360,000
Veroy, Capital 350,000
760,000 760,000

Question 7:
Liscano, Capital 360,000
Veroy, Capital 350,000
Total Capital 710,000

Question 8:
Cash 300,000
Furnitures and fixtures 160,000
Inventory 50,000
Building 250,000
Total Assets 760,000 Total Assets of the partnership

Question 9:
Mortgage Payable 50,000
Total Liabilities 50,000

10. See and Cinco formed a partnership. See contributed a

building that she purchased 10 years ago for P100,000. The
accumulated depreciation on the building on the date of
formation of the partnership is P25,000 and the fair value is
P150,000.

Adjustments:

Accumulated Depreciation 25,000

See, Capital 25,000
Amount credited to Marcial's Capital

Tubo, Capital
600 10,000
20,000 5,000
2,000

7,600 150,000

142,400
 Net Credit Capital (Tubo)

total liabilities before formation

Capital before formation

Cash contribution to the partnership

Assets after formation

rmation of the partnership?

Veroy, Capital
50,000 400,000

350,000
 Total Capital at the formation of the partnership

Assets of the partnership

Total liabilities of the partnership

 UNADJUSTED TRIAL BALANCE
PARTICULARS DR. CR.
Cash 13,500
Acc. R. 25,500
Supplies 2,100
Prepaid Rent 16,200
Prepaid insurance 4,320
Office Equipment 36,000
Accumulated Depreciation-O.E 9,000
Automobile 90,000
Accumulated Depreciation-A 3,240
Accounts Payable 1,620
Unearned Management Fees 37,170
Pacita, V; Capital 131,460
Pacita, V; Drawings 40,500
Sales Commissions Revenue 145,800
Salaries exp 89,910
Advertising exp 6,510
Automobile exp 2,850
Miscellaneous exp 900
Total: 328,290 328,290

ADJUSTING ENTRIES:
a Supplies expense 1,425
Supplies 1,425

b Rent expense 9,450

Prepaid rent 9,450

c Insurance expense 2,520

Prepaid Insurance 2,520

d Depreciation expense-O.E 3,300

Accumulated Depreciation-O.E 3,300

e Depreciation expense- A 11,250

Accumulates depreciation- A 11,250

f Unearned Management Fees 12,390

Management Fees exp 12,390
 PACITA REALTY
TRIAL BALANCE
DEC. 31, 2023
ADJUSTED TRIAL BALANCE INCOME STATEMENT
PARTICULARS DR. CR. DR.
Cash 13,500
Acc. R. 25,500
Supplies 675
Prepaid Rent 6,750
Prepaid insurance 1,800
Office Equipment 36,000
Accumulated Depreciation-O.E 12,300
Automobile 90,000
Accumulated Depreciation-A 14,490
Accounts Payable 1,620
Unearned Management Fees 24,780
Pacita, V; Capital 131,460
Pacita, V; Drawings 40,500
Sales Commissions Revenue 145,800
Salaries exp 89,910 89,910
Advertising exp 6,510 6,510
Automobile exp 2,850 2,850
Miscellaneous exp 900 900

Supplies expense 1,425 1,425

Rent expense 9,450 9,450
Insurance expense 2,520 2,520
Depreciation expense-O.E 3,300 3,300
Depreciation expense- A 11,250 11,250
Management Fees exp 12,390
TOTAL: 342,840 342,840 128,115
30,075
158,190
INCOME STATEMENT BALANCE SHEET STATEMENT OF OWNER'S EQUITY
CR. Beg. Cap.
13,500 Add:
25,500 Net Income
675 Less:
6,750 Drawings
1,800 End Cap.
36,000
12,300
90,000
14,490
1,620
24,780
131,460
40,500
145,800 214,725 184,650
30,075
214,725 214,725

12,390
158,190
NET INCOME
158,190
EMENT OF OWNER'S EQUITY
131,460

30,075

40,500
121,035