Problem 1: Mr. Garcia owned the Garcia Enterprises. He invited Mr.

Ramirez to join him a cash

investment of P100,000.00. They agreed that the assets would be adjusted at their current values. Below is
the post-closing balance of Garcia Enterprises
Garcia Enterprises
Post-Closing Balance
December 31, 2017
Debit Credit
Cash 160,000
Accounts receivable 200,00
Allowance for bad debts 2,000
Merchandise inventory 300,000
Furniture and fixtures 100,000
Accumulated depreciation 10,000
Accounts payable 60,000
Notes payable 2,000
Garcia, Capital 686,000
760,000 760,000
======= =======
Adjustments:
1. Merchandise inventory sold is worth, P 200,000.
2. Allowance for bad debts should be increased by P5,000.
3. Furniture and fixtures will be valued at P25,000.
Required:
1. Give the entries to adjust the assets of Mr. Garcia.
2. Record the investments of the partners in the new partnership book.

Problem 1: Mr. Garcia owned the Garcia Enterprises. He invited Mr. Ramirez to join him a cash
investment of P100,000.00. They agreed that the assets would be adjusted at their current values. Below is
the post-closing balance of Garcia Enterprises
Garcia Enterprises
Post-Closing Balance
December 31, 2017
Debit Credit
Cash 160,000
Accounts receivable 200,00
Allowance for bad debts 2,000
Merchandise inventory 300,000
Furniture and fixtures 100,000
Accumulated depreciation 10,000
Accounts payable 60,000
Notes payable 2,000
Garcia, Capital 686,000
760,000 760,000
======= =======
Adjustments:
4. Merchandise inventory sold is worth, P 200,000.
5. Allowance for bad debts should be increased by P5,000.
6. Furniture and fixtures will be valued at P25,000.
Required:
3. Give the entries to adjust the assets of Mr. Garcia.
4. Record the investments of the partners in the new partnership book.