supernatural093
Feb 25, 2015, 11:27 PM
Hi there. Good Day, I'm in need of help with this problem please? I'm most confused how I should restate the assets and liabilities. I tried using the adjustment of sole proprietorship accounting but I keep getting stuck. And the question was a bit confusing. :(-
Jane and Jessie are partners sharing profits in a 60:40 ratio. A statement of financial position prepared for the partners on April 1, 2015 as follows:
ASSETS
Liabities & Capital
Cash
480,000
Accounts Payable
890,000
Accounts Receivable
920,000
Jane, Capital
1,330,000
Inventories
1,650,000
Jessie, Capital
1,080,000
Equipment
700,000
Less: Accumulated Depreciation
(450,000)
Total Assets
3,300,000
Total Liabilities and Capital
3,300,000
On this date, the partners agreed to admit Tria as a partner. The terms of the agreement are summarize below:
Assets and Liabilities are to be restated as follows:
a. An allowance for possible uncollectibles of 45,000 is to be established.
b. Inventories are to be restated at their present replacement value of 1,700,000.
c. Accrued expenses of 40,000 are to be recognized.
Jane, Jessie and Tria will divide profits in the ratio of 5:3:2. Capital balances of the partners after the formation of the new partnership are to be in the stated ratio, with Jane and Jessie making cash settlement between themselves outside of the partnership to adjust their capitals, and Tria investing cash in the partnership for his interest. Determine how much cash is to be invested by Tria.
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Thank you very much!!
Jane and Jessie are partners sharing profits in a 60:40 ratio. A statement of financial position prepared for the partners on April 1, 2015 as follows:
ASSETS
Liabities & Capital
Cash
480,000
Accounts Payable
890,000
Accounts Receivable
920,000
Jane, Capital
1,330,000
Inventories
1,650,000
Jessie, Capital
1,080,000
Equipment
700,000
Less: Accumulated Depreciation
(450,000)
Total Assets
3,300,000
Total Liabilities and Capital
3,300,000
On this date, the partners agreed to admit Tria as a partner. The terms of the agreement are summarize below:
Assets and Liabilities are to be restated as follows:
a. An allowance for possible uncollectibles of 45,000 is to be established.
b. Inventories are to be restated at their present replacement value of 1,700,000.
c. Accrued expenses of 40,000 are to be recognized.
Jane, Jessie and Tria will divide profits in the ratio of 5:3:2. Capital balances of the partners after the formation of the new partnership are to be in the stated ratio, with Jane and Jessie making cash settlement between themselves outside of the partnership to adjust their capitals, and Tria investing cash in the partnership for his interest. Determine how much cash is to be invested by Tria.
-
Thank you very much!!