Partnership formation

S and R agreed to form a partnership. S contributed cash of P600,000 while R contributed a machine costing P1,700,000 but with a current fair value of P1,900,000. The partners agreed that since S will bring in her expertise and experience to the business, S and R shall have a 60:40 capital interest respectively. What is the agreed capital of R after the formation of the partnership?

• 600,000

• 1,000,000

• 1,500,000

• 1,900,000

S and R agreed to form a partnership. S contributed cash of P600,000 while R contributed a machine costing P1,700,000 but with a current fair value of P1,900,000. The partners agreed that since S will bring in her expertise and experience to the business, S and R shall have a 60:40 interest respectively. What is the agreed capital of S after the formation of the partnership?

• 600,000

• 1,000,000

• 1,500,000

• 1,900,000

S and R agreed to form a partnership. S contributed cash of P600,000 while R contributed a machine costing P1,700,000 but with a current fair value of P1,900,000. The partners agreed that since S will bring in her expertise and experience to the business, S and R shall have a 60:40 interest respectively. What is the journal entry to record the TRANSFER OF CAPITAL?

• debit: R, capital for 900,000 credit: S, capital for P900,000

• debit: R, capital for 780,000 credit: S, capital for P780,000

• debit: S, capital for 900,000 credit: R, capital for P900,000

• debit: S, capital for 780,000 credit: R, capital for P780,000

S and R agreed to form a partnership. S contributed cash of P600,000 while R contributed a machine costing P1,700,000 but with a current fair value of P1,900,000. The partners agreed that since S will bring in her expertise and experience to the business. S and R shall have a 60:40 interest respectively. What is the journal entry to record the capital contribution of R?

• debit: Cash for P 1700,000 credit: R, Capital for P1,700,000

• debit: Machinery for P 1900,000 credit: R, Capital for P1,900,000

• debit: Machinery for P 1700,000 credit: R, Capital for P1,700,000

• debit: Machinery for P 1000,000 credit: R, Capital for P1,000,000

S and R agreed to form a partnership. S contributed cash of P600,000 while R contributed a machine costing P1,700,000 but with a current fair value of P1,900,000. The partners agreed that since S will bring in her expertise and experience to the business. S and R shall have a 60:40 interest respectively. If the partners agreed to have a CASH SETTLEMENT outside the partnership, What is the journal entry to record the cash settlement of the partner?

• Debit: Cash, credit: S, Capital

• Debit: S, Capital Credit: Cash

• Debit: S, Capital Credit: R, Capital

• No entry

S and R agreed to form a partnership. S contributed cash of P600,000 while R contributed a machine costing P1,700,000 but with a current fair value of P1,900,000. The partners agreed that since S will bring in her expertise and experience to the business. S and R shall have a 60:40 interest respectively. If the partners agreed to have a CASH SETTLEMENT outside the partnership, What is the journal entry to record the cash settlement of the partner?

• Debit: Cash, credit: S, Capital

• Debit: S, Capital Credit: Cash

• Debit: S, Capital Credit: R, Capital

• No entry

S and R agreed to form a partnership. S contributed cash of P600,000 while R contributed a machine costing P1,700,000 but with a current fair value of P1,900,000. The partners agreed that since S will bring in her expertise and experience to the business. S and R shall have a 60:40 interest respectively. One partner shall provide additional investment and the other will withdraw. Which of the following is correct?

• R shall withdraw P 780,000

• R shall withdraw P900,000

• S shall withdraw P900,00

• S shall withdraw P780,000

S and R agreed to form a partnership. S contributed cash of P600,000 while R contributed a machine costing P1,700,000 but with a current fair value of P1,900,000. The partners agreed that since S will bring in her expertise and experience to the business. S and R shall have a 60:40 interest respectively. One partner shall provide additional investment and the other will withdraw. What is the journal entry to record the investment and withdrawal of the partners?

• Debit: S. Drawing P900,000 Credit: R, capital P900,000

• Debit: R. Drawing P900,000 Credit: S, capital P900,000

• Debit: S. Drawing P780,000 Credit: R, capital P780,000

• Debit: R. Drawing P780,000 Credit: R, capital P780,000

In a partnership when 2 or more Sole proprietors form a partnership. The assets and liabilities need not to be adjusted prior to formation but closing the book of existing sole proprietorship is necessary.

• True

• False

The asset contributions of the partners to the partnership and any related liabilities assumed by the partnership are recorded in the partnership books at

• historical cost

• lower of historical cost or fair value

• agreed value or fair value