Professional Documents
Culture Documents
LIQUIDATION
Dissolution
3. Incorporation of a partnership
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b. revaluing/ adjusting partnership assets and liabilities using
a temporary account called the Capital Adjustment
account. The Capital Adjustment account is closed to the
partners capital accounts using their profit and loss ratio.
A, Drawing xxx
B, Drawing xxx
A, Capital xxx
B, Capital xxx
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of a liability Liability xxx
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e. There is no increase in total assets and no increase in total
partners equity.
Pro-forma Entries
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Bonus
Pro-forma Entries
Vague Problems
Special Terms
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3. Fraction of interest this is the interest or equity of a partner
expressed in fraction
Withdrawal of a Partner
Pro-forma Entries
By purchase of
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interest by the
Partnership
C, Capital xxx
Cash/Liability xxx
ABC Partnership
Trial Balance
December 31, 200x
Cash P15,000
Accounts receivable 10,000
Allowance for bad debts P800
Office furniture 25,000
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Accumulated depreciation 1,000
Accounts payable 3,200
Alex, Capital 10,000
Bert, Capital 15,000
Charles, Capital 20,000
Total P50,000 P50,000
Alex, Bert, Charles divide profit and loss equally. With the
consent of all the partners, Mr. Don is admitted as a new partner.
The following adjustments are agreed upon:
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Prepare the entry(ies) to record the admission of Mr. Cris under
the following independent assumptions:
Drew, Earl and Francis share profit and loss 3:2:3. Drew
withdraws from the partnership. Prepare all the necessary
journal entries under the following independent assumptions:
January 2014