Problem 4 On March 1, 2020, EE and FF decided to combine their business and form a partnership. Their balance sheets on March 1 before adjustment EE FF Cash Accounts receivable 90,000.00 185,000.00 300,000.00 350,000.00 (50,000.00) 115,000.00 63,750.00 1,053,750.00 37,500.00 135,000.00 195,000.00 100,000.00 (10,000.00) 27,500.00 30,000.00 515,000.00 Inventories Furniture and fixtures Accumulated depreciation Office equipment Prepaid expenses Total Accounts payable EE, Capital FF, Capital Total 457,500.00 596,250.00 180,000.00 1,053,750.00 335,000.00 515,000.00 They agreed to have the following items recorded in their books: 1. Provide 2% allowance for doubtful accounts. 2. EE's furniture and fixtures should be P310,000, while FF's office equipment is underdepreciated by P2,500. 3. Rent expense incurred previously by EE was not yet recorded amounting to P10,000, while 4. The fair value of EE's anf FF's inventory amounted to P295,000 and P210,000 each respectively.
Problem 4 On March 1, 2020, EE and FF decided to combine their business and form a partnership. Their balance sheets on March 1 before adjustment EE FF Cash Accounts receivable 90,000.00 185,000.00 300,000.00 350,000.00 (50,000.00) 115,000.00 63,750.00 1,053,750.00 37,500.00 135,000.00 195,000.00 100,000.00 (10,000.00) 27,500.00 30,000.00 515,000.00 Inventories Furniture and fixtures Accumulated depreciation Office equipment Prepaid expenses Total Accounts payable EE, Capital FF, Capital Total 457,500.00 596,250.00 180,000.00 1,053,750.00 335,000.00 515,000.00 They agreed to have the following items recorded in their books: 1. Provide 2% allowance for doubtful accounts. 2. EE's furniture and fixtures should be P310,000, while FF's office equipment is underdepreciated by P2,500. 3. Rent expense incurred previously by EE was not yet recorded amounting to P10,000, while 4. The fair value of EE's anf FF's inventory amounted to P295,000 and P210,000 each respectively.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Topic Video
Question
1. Compute the net (debit)/credit adjustment for EE anf FF.
EE FF EE FF
A. 28,700 ; 28,200 C. (8,700) ; 1,800
B. (28,700) ; (28,200) D. 8,700 ; (1,800)
2. Compute the total assets after the formation.
A. 1,607,650 C. 1,579,850
B. 1,570,850 D. 1,568,750
3. If the partners are to share
A. 400,000 C. 369,740
B. 391,700 D. 391,700
4. If If the partners are to share profits and losses in the ratio of 6:4 and their capital is top reflect this relationship with EE’s capital to be used as a basis, what is the capital of FF after the formation?
A. 400,000 C. 369,740
B. 391,700 D. 391,700
Transcribed Image Text:Problem 4
On March 1, 2020, EE and FF decided to combine their business and form a partnership. Their balance sheets on March 1 before adjustments showed the following:
EE
FF
Cash
90,000.00
185,000.00
300,000.00
350,000.00
(50,000.00)
115,000.00
63,750.00
1,053,750.00
37,500.00
135,000.00
195,000.00
100,000.00
(10,000.00)
27,500.00
30,000.00
Accounts receivable
Inventories
Furniture and fixtures
Accumulated depreciation
Office equipment
Prepaid expenses
Total
515,000.00
Accounts payable
EE, Capital
FF, Capital
Total
457,500.00
596,250.00
180,000.00
335,000.00
1,053,750.00
515,000.00
They agreed to have the following items recorded in their books:
1. Provide 2% allowance for doubtful accounts.
2. EE's furniture and fixtures should be P310,000, while FF's office equipment is underdepreciated by P2,500.
3. Rent expense incurred previously by EE was not yet recorded amounting to P10,000, while
4. The fair value of EE's anf FF's inventory amounted to P295,000 and P210,000 each respectively.
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education