On February 14, AA and BB formed apartnership and contributed the followingassets at historical costs:AABBCashP600,000 P200,000InventoriesFurniture and fixturesDelivery equipmentLandThe land was subject to a mortgage whichhas an unpaid balance of P50,000. Themortgage will be assumed by the partnership.AA and BB agreed to share profits and lossesin the ratio of 1:2, respectively. The partnersagreed to contribute inventories (BB is tocontribute inventories worth 2.5 times thepeso value of the inventories to becontributed by AA) in order to have theircapital credits in the same ratio as theirprofits and losses ratio. The land was subject to a mortgage whichhas an unpaid balance of P50,000. Themortgage will be assumed by the partnership.AA and BB agreed to share profits and lossesin the ratio of 1:2, respectively. The partnersagreed to contribute inventories (BB is tocontribute inventories worth 2.5 times thepeso value of the inventories to becontributed by AA) in order to have theircapital credits in the same ratio as theirprofits and losses ratio.How much is the capital account of BB uponformation of the partnership?

Calculation of Capital Contributed by Partner BB Capital Contribution by BB = P 200,000 + P 80,000 +…

Answered: On February 14, AA and BB formed a…

On February 14, AA and BB formed a partnership and contributed the following assets at historical costs: AA BB Cash P600,000 P200,000

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

On February 14, AA and BB formed a
partnership and contributed the following
assets at historical costs:
AA
BB
Cash
P600,000 P200,000
Inventories
Furniture and fixtures
Delivery equipment
Land
The land was subject to a mortgage which
has an unpaid balance of P50,000. The
mortgage will be assumed by the partnership.
AA and BB agreed to share profits and losses
in the ratio of 1:2, respectively. The partners
agreed to contribute inventories (BB is to
contribute inventories worth 2.5 times the
peso value of the inventories to be
contributed by AA) in order to have their
capital credits in the same ratio as their
profits and losses ratio.

The land was subject to a mortgage which
has an unpaid balance of P50,000. The
mortgage will be assumed by the partnership.
AA and BB agreed to share profits and losses
in the ratio of 1:2, respectively. The partners
agreed to contribute inventories (BB is to
contribute inventories worth 2.5 times the
peso value of the inventories to be
contributed by AA) in order to have their
capital credits in the same ratio as their
profits and losses ratio.
How much is the capital account of BB upon
formation of the partnership?

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