Acctg Essay

6009 Words Mar 7th, 2016 25 Pages
PRACTICAL ACCOUNTING 2
1.
Katy Perry developed an interesting idea for marketing sailboats in Death Valley. She interested Lady Gaga in joining her in a partnership. Following the information you have collected relative to their original contribution.
Lady Gaga contributed P 30,000 cash, a track of land, and delivery equipment. Katy Perry contributed P 60,000 cash. After giving special consideration to the tax bases of the assets contributed, the relative usefulness of the assets to the partnership versus the problems of finding buyers for the assets and contributing cash, and other such factors, the partners agreed that Katy Perry’s contribution was equal to 40 percent of the partnership’s tangible assets, measured in terms of the
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Cash
Delivery equipment
Land
Goodwill
Perry, capital
Gaga, capital

P 90,000

d.
Cash
Delivery equipment
Land
Perry, capital
Gaga, capital

40,000
40,000
50,000
110,000
110,000

P 90,000
40,000
40,000
102,000
68,000

2.
The statement of financial position as of July 31, 2012, for the business owned by Katniss Everdeen, shows the following assets and liabilities:
Cash

P
50,000

Accounts receivable

Furniture & Fixtures
Accounts payable

P

164,000
28,800

134,000
Merchandise inventory
220,000
It is estimated that 5% of the receivables will prove uncollectible. The cash balance includes a 1,000 investment shares classified as fair value through profit and loss recorded at its cost of P 8,000. The shares last sold on the market were at
P 21.50 per share. Merchandise inventory includes obsolete items costing P 20,000 that will probably realized only P 4,000. Depreciation has never been recorded; however, the furniture and fixtures are two years old, have estimated total life of 10 years and would cost P 240,000 if purchased new. Prepaid items amount to P 7,000. Peeta Mellark is to be admitted as a partner upon investing P 200,000 cash and P 100,000 merchandise.
How much capital is to be credited to Katniss Everdeen upon formation of the partnership?
a.
P 539,200
b.
P 606,200
c.
P 565,000
d.

P 613,000

3.
Partners Daniel, Katerina, Nathan, and Johanna, share profits in the ratio of

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