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School
Polytechnic University of the Philippines**We aren't endorsed by this school
Course
ACCOUNTING 101
Subject
Accounting
Date
Dec 30, 2024
Pages
2
Uploaded by ProfSwanPerson764
1. Introduction:. Startby giving an overview of the concept of partnership formationin accounting.Briefly explain what happens when two ormore individuals/businesses combine theirresources and form a partnership.. Mention that contribution of assets, valuation of those assets, and howliabilities are transferred are important aspects when forming partnerships.2.Presentation of Each Case:. For eachmultiple-choice question (MC 2-7 toMC 2-11),explain the scenarioand walk through the calculations step by step. Make sure to present both the problem and the solution, but also elaborate onhow you reached the correct answer.MC 2-7: Aster and Amie forming a partnershipScenario: Aster and Amie are forming apartnership by combining their businesses. ImportantDetails:Uncollectible accounts: Aster (P7,500), Amie (P5,400). Amie’s furniture and fixtures areunder-depreciated by P9,000. The goal is to make their capital accounts reflect the net assets invested. Calculation:. Adjust foruncollectible accounts and depreciation. Aster: P489,000 - P7,500= P481,500Amie: P273,000- P5,400 - P9,000= P258,600Answer: The capital balances would beP481,500 for Aster and P258,600 for Amie.Presentation Tip:Use abalance sheet format to show the initial capital, then subtract the adjustments foruncollectible accounts and under-depreciation toshow the final balances.MC 2-8: Antonia and Andrea PartnershipScenario: Antonia’s business is short of cash, and Andrea contributes twice the interestin the new partnership. KeyPoints:. Adjust the accounts forinventory and store equipment to their fair values. . Adjust the allowance for uncollectible accounts.Calculation:. Adjusted assets of Antonia:P9, 000 (cash) + (P 189, 000 − P 12, 000) (adjusted accounts receivable) + P460, 000 (inventory) + P 140, 000 (store equipment) = P786,000 Andrea contributes twice Antonia’sinterest:P786, 000 × 2 = P 1, 572, 000Answer: Andrea would contributeP1,572,000.Presentation Tip:Use a T-account or simple assets table toshow the adjustments in the values of Antonia’s assets. Highlight that Andrea contributes double that amount.MC 2-9: Almeda and Asistio Partnership. Scenario: Almeda and Asistio are forming a partnership, and their capital contributionsmust be equal after liabilities and assets are accounted for. KeyPoints:. Calculate thenet assets of each partner and determinehowmuch cash Almedaneeds to contribute to equalize the capital. Calculation:
Net assets(assets minus liabilities) for Almeda:(P40, 000 accounts receivable + P90, 000 inventory + P 100, 000 equipment) − P30, 000 accounts payable =P200, 000 . Required capital:Each partner should have P300,000in net assets.. Cash contribution by Almeda:P300, 000 − P200, 000 = P 100, 000Answer: Almedaneeds to contributeP100,000.Presentation Tip:Use visuals such as a before-and-after table that shows the assets and liabilities before and after the contribution of cash.MC 2-10: Total Assets of the Partnership. Scenario:Use the information fromMC 2-9 to calculate the total assets of thepartnership. Calculation:Totalpartnership capital= P600,000Total liabilities= P30,000 (Almeda)+ P20,000 (Asistio)= P50,000 . Total assets = Total capital + Total liabilities:P600, 000 + P50, 000 = P650, 000Answer: The total assets of thepartnership areP650,000.Presentation Tip:. Summarize thisusing a simple balance sheet layout to show how the total assets arederived from capital and liabilities.MC 2-11: Goodwill to be Credited to Asistio. Scenario: The excess capital creditover the fair value of net assets is recognizedas goodwill. KeyPoints:Asistio's fair value of contributed assets (net of liabilities):(P80, 000 + P 120, 000) − P20, 000 =P 180, 000 . Required capital=P300,000(half of the total capital)Goodwill= P300,000 - P180,000=P120,000Answer: The goodwill credited to Asistio isP120,000.Presentation Tip:. Use a Goodwill calculation chart thatshows thestep-by-step process of calculating the excess capital credit andhow itis attributed asgoodwill.