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    Actg.-9-Actg.-for-Spec-Txn-Prelim Quiz or Activity

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    Cherry An Gacula
    Special Transaction

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    © All Rights Reserved
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    Actg.-9-Actg.-for-Spec-Txn-Prelim Quiz or Activity

    Uploaded by

    Cherry An Gacula
    21 views2 pages
    Special Transaction

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    © © All Rights Reserved

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    Special Transaction

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    21 views2 pages

    Actg.-9-Actg.-for-Spec-Txn-Prelim Quiz or Activity

    Uploaded by

    Cherry An Gacula
    Special Transaction

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
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    Accounting 9: Accounting for Special Transaction:

    Deadline: September 21, 2024

    Take home quiz: Form a group consisting of 3 members. Use worksheet (excel document)
    to answer the requirements below:
    The existing partnership of Ang, Bat and Choy reported the following immediately prior to the
    retirement of Choy:
    Amount Profit and Loss ratio
    Cash P150,000
    Equipment 300,000
    Accounts payable 150,000
    Ang, capital 75,000 25%
    Bat, capital 100,000 30%
    Choy, capital 125,000 45%
    The partners had agreed that the equipment is overstated by 50,000. Accrued salaries of 10,000 is
    to be recognized.
    Choy is to be paid by the partnership at book value of his adjusted interest after the agreed
    adjustment of its assets and liabilities.
    Required: 5 points for each requirement: 5 points x 7 requirements = 35 points
    A. Make the journal entries for the
    1. Adjustment and
    2. Retirement of Choy
    B. Compute the following:
    1. The total asset of the partnership after the agreed adjustment before retirement of Choy.
    2. The adjusted total capital of the partnership after the agreed adjustment before the retirement
    of Choy.
    3. The amount of payment to Choy for his retirement.
    4. The total capital of the partnership after the retirement of Choy.
    5. The new profit and loss ratio of Ang and Bat after the retirement of Choy in the absence of
    specific agreement.

    Take Home Activity


    Incorporation of a partnership
    Amount Profit and Loss
    Ratio
    Cash P100,000
    Accounts receivable 300,000
    Accounts payable 50,000
    Xiamen capital 50,000 25%
    Yemen capital 100,000 30%
    Zmen capital 200,000 45%

    Suppose that the partnership is to be incorporated with two other incorporators, and the
    partnership’s assets and liabilities are to be recorded at book value. The new corporation is
    authorized to issue 10,000 common shares with P50 par value.
    Required: 5 points for each requirement: 5 points x 6 requirements = 30 points
    A. Compute the following:
    1. Total ordinary shares to be issued to each of the original partners.
    2. The total interest in % of Xiamen in the newly formed corporation if the remaining shares of
    total authorized were all issued to the two other stockholders.
    3. The total assets of the newly formed corporation, if the two other incorporators paid in cash
    for the total shares issued to them.
    4. The stockholder’s equity of the newly formed corporation, considering the contributions in
    number 3.
    B Prepare the complete journal entries supposing that the old partnership books are to be used as
    a corporation’s books in recording the
    1. Investments of the partners.
    2. Cash contribution of the two incorporators pertaining the full payment of the remaining
    common shares.

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