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Acct 2 Problem 3

Mr. Garcia owned Garcia Enterprises and invited Mr. Ramirez to join as a partner with a P100,000 cash investment. The post-closing balance sheet shows assets and capital accounts will be adjusted to current values. Adjustments include reducing inventory by P200,000, increasing allowance for bad debts by P5,000, and reducing the value of fixtures to P25,000. Entries must be made to adjust assets and record the partners' investments in the new partnership.

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690 views1 page

Acct 2 Problem 3

Mr. Garcia owned Garcia Enterprises and invited Mr. Ramirez to join as a partner with a P100,000 cash investment. The post-closing balance sheet shows assets and capital accounts will be adjusted to current values. Adjustments include reducing inventory by P200,000, increasing allowance for bad debts by P5,000, and reducing the value of fixtures to P25,000. Entries must be made to adjust assets and record the partners' investments in the new partnership.

Uploaded by

Alfie boy
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Problem 1: Mr. Garcia owned the Garcia Enterprises. He invited Mr.

Ramirez to join him a cash


investment of P100,000.00. They agreed that the assets would be adjusted at their current values. Below is
the post-closing balance of Garcia Enterprises
Garcia Enterprises
Post-Closing Balance
December 31, 2017
Debit Credit
Cash 160,000
Accounts receivable 200,00
Allowance for bad debts 2,000
Merchandise inventory 300,000
Furniture and fixtures 100,000
Accumulated depreciation 10,000
Accounts payable 60,000
Notes payable 2,000
Garcia, Capital 686,000
760,000 760,000
======= =======
Adjustments:
1. Merchandise inventory sold is worth, P 200,000.
2. Allowance for bad debts should be increased by P5,000.
3. Furniture and fixtures will be valued at P25,000.
Required:
1. Give the entries to adjust the assets of Mr. Garcia.
2. Record the investments of the partners in the new partnership book.

Problem 1: Mr. Garcia owned the Garcia Enterprises. He invited Mr. Ramirez to join him a cash
investment of P100,000.00. They agreed that the assets would be adjusted at their current values. Below is
the post-closing balance of Garcia Enterprises
Garcia Enterprises
Post-Closing Balance
December 31, 2017
Debit Credit
Cash 160,000
Accounts receivable 200,00
Allowance for bad debts 2,000
Merchandise inventory 300,000
Furniture and fixtures 100,000
Accumulated depreciation 10,000
Accounts payable 60,000
Notes payable 2,000
Garcia, Capital 686,000
760,000 760,000
======= =======
Adjustments:
4. Merchandise inventory sold is worth, P 200,000.
5. Allowance for bad debts should be increased by P5,000.
6. Furniture and fixtures will be valued at P25,000.
Required:
3. Give the entries to adjust the assets of Mr. Garcia.
4. Record the investments of the partners in the new partnership book.

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