ACCOUNTING FOR PARTNERSHIP FORMATION AND OPERATIONS

P$1$

On April $9,2023,$ Jampong who has his own retail business, and his trusted associate Yuan, decided to form a partnership wherein they will divide profits in the ratio of $60$:$40,$ respectively. The statement of financial position of the business of Jampong is as follows:

Jampong Merchandising

Statement of Financial Position

April $9,2023$

$\backslash$table$[[,$Assets,,$],[$Cash$,$P$,4,000,],[$Accounts Receivable,$160,000,,],[$Less: Allowance for Uncollectible Accounts,$16,000,144,000,],[$Inventory$,,200,000,],[$Equipment$,50,000,,],[$Less: Accumulated Depreciaiton $-$ Equipment,$10,000,40,000,],[,,,388,000]]$

Accounts Payable

Liabilities and Capital

Jampong, Capital

Total Liabilities and Capital

P

$\backslash$table$[[36,000],[352,000],[]]$

Conditions agreed upon between the partners before the formation of the partnership are as follows:

a$.$ The accounts receivable of Jampong is esti nated to be $70\%$ realizable.

b$.$ The accounts payable will be assumed by the partnership.

c$.$ The capital of the partnership is based on the adjusted capital balance of Jampong. Yuan is to contribute cash in order to make the partners' capital balances proportionate to the profit and loss ratio.

During the remainder of the year, the partnership earned net profit after tax of $P850,000.$ The temporary withdrawals of Jampong and Yuan from the partnership were $P50,000$ and $P45,000,$ respectively.

Required:

Prepare the necessary journal entries in the books of Jampong.

Prepare the opening journal entries in the books of the partnership.

Prepare the partnership's statement of financial position immediately after its formation on April $9,2023.$

Prepare the necessary journal entries to distribute profit$($loss$)$ and the to close the income summary and the drawing accounts.