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Exercise 3: 1. Initial Capital Investments (Compound Entry) DR CR

The document contains journal entries for a partnership between Elmer and Edam. It records: 1) Initial capital investments of cash, land, buildings and notes payable contributed by Elmer and Edam. 2) Cash withdrawals by Elmer and Edam. 3) Revenue, expenses and the distribution of net income to Elmer and Edam based on their capital contribution percentages. It also includes a statement of partner's equity showing the opening balances, contributions, withdrawals and ending balances for Elmer and Edam.

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511 views4 pages

Exercise 3: 1. Initial Capital Investments (Compound Entry) DR CR

The document contains journal entries for a partnership between Elmer and Edam. It records: 1) Initial capital investments of cash, land, buildings and notes payable contributed by Elmer and Edam. 2) Cash withdrawals by Elmer and Edam. 3) Revenue, expenses and the distribution of net income to Elmer and Edam based on their capital contribution percentages. It also includes a statement of partner's equity showing the opening balances, contributions, withdrawals and ending balances for Elmer and Edam.

Uploaded by

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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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EXERCISE 3

A 1. Initial Capital Investments (Compound Entry)


Dr Cr
Cash ₱ 900,000.00
Land ₱ 300,000.00
Building ₱ 500,000.00
Note Payable ₱ 200,000.00
Elmer, Capital ₱ 900,000.00
Edam, Capital ₱ 600,000.00

2. Cash Withdrawals

Elmer, Drawing ₱ 30,000.00


Edam, Drawing ₱ 25,000.00
Cash ₱ 55,000.00

3. Net Income and Share in Profit

Revenue ₱ 375,000.00
Income and Expense Summary ₱ 375,000.00

Income and Expense Summary ₱ 125,000.00


Expenses ₱ 125,000.00

Income and Expense Summary ₱ 250,000.00


Elmer, Capital ₱ 150,000.00
Edam, Capital ₱ 100,000.00

Computation:
Revenue ₱ 375,000.00
Less: Operating Expenses ₱ 125,000.00
Net Income ₱ 250,000.00

Additional Closing Entries (If Required):

Elmer, Capital ₱ 30,000.00


Edam, Capital ₱ 25,000.00
Elmer, Drawings ₱ 30,000.00
Edam, Drawings ₱ 25,000.00
B Elmer and Edam Partnership
Statement of Partner's Equity
For the year ended 2019

Elmer Edam Total


Beginning Balance, Jan. 1 ₱ 900,000.00 ₱ 600,000.00 ₱ 1,500,000.00
Add: Additional Investments - - -
Add: Net Income ₱ 150,000.00 ₱ 100,000.00 ₱ 250,000.00
Less: Withdrawals ₱ 30,000.00 ₱ 25,000.00 ₱ 55,000.00
Ending Balance, Dec. 31 ₱ 1,020,000.00 ₱ 675,000.00 ₱ 1,695,000.00
Exercise 4

A Computation:
40% 60%
EBA CLARA
Merchandise Inventory ₱ 100,000.00 Furniture and Fixtures ₱ 250,000.00
Equipment ₱ 300,000.00 Cash ₱ 125,000.00
Less: Note Payable ₱ 150,000.00
Eba, Capital ₱ 250,000.00 Clara, Capital ₱ 375,000.00

Clara should invest Cash of Php 125,000


B Partnership's Books

Eba's Investments Journal Entry:

Merchandise Inventory ₱ 100,000.00


Equipment ₱ 300,000.00
Note Payable ₱ 150,000.00
Eba, Capital ₱ 250,000.00

Clara's Investments Journal Entry:

Furniture and Fixtures ₱ 250,000.00


Cash ₱ 125,000.00
Clara, Capital ₱ 375,000.00

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