30,000.00 Accounts Receivable 400,000.00 Allowance for Doubtful Accounts 36,000.00 Merchandise Inventory 110,000.00 Equipment-net 134,000.00 Accounts Payable 38,000.00 Hershey, Capital 300,000.00 Sonny Capital 300,000.00 On July 1, 2021 prior to the admission of Sheryl, the partnership of Hershey and Sonny have the following account balances: Hershey and Sonny share profits and loss on 1:1 ratio. Before admission of Sheryl, the partners agree on the following adjustments to bring the assets and liabilities to their fair values: a. The allowance for doubtful accounts should be brought to 10% of the outstanding accounts receivable. b. The current market value of the merchandise inventory is P140,000. C. Accrued expenses of P4,000 should be recognized in the accounting records If Sheryl is admitted into the partnership upon cash investment of P400,000 for 2/5 interest in capital the total popital of the partnershin just AFTER the admission of Sheryl? *

30,000.00 Accounts Receivable 400,000.00 Allowance for Doubtful Accounts 36,000.00 Merchandise Inventory 110,000.00 Equipment-net 134,000.00 Accounts Payable 38,000.00 Hershey, Capital 300,000.00 Sonny Capital 300,000.00 On July 1, 2021 prior to the admission of Sheryl, the partnership of Hershey and Sonny have the following account balances: Hershey and Sonny share profits and loss on 1:1 ratio. Before admission of Sheryl, the partners agree on the following adjustments to bring the assets and liabilities to their fair values: a. The allowance for doubtful accounts should be brought to 10% of the outstanding accounts receivable. b. The current market value of the merchandise inventory is P140,000. C. Accrued expenses of P4,000 should be recognized in the accounting records If Sheryl is admitted into the partnership upon cash investment of P400,000 for 2/5 interest in capital the total popital of the partnershin just AFTER the admission of Sheryl? *

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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As of July 1, 2020, MM and AA decided to form a partnership. Their balance sheets on this date are: Cash Accounts Receivable Allowance for doubtful accounts Merchandise Inventory Machinery and Equipment Total P705,000 MM AA P 38,000 255,000 (30,000) 202,000 270,000 P735,000 240,000 495,000 P735,000 P 15,000 680,000 (140,000) - 150,000 Accounts Payable MM, capital AA, capital Total P705,000 135,000 570,000 - The partners agreed that the machinery and equipment of MM is under depreciated by P15,000 and that of AA by P45,000. Allowances for doubtful accounts is to be set up amounting to P120,000 for MM and P40,000 for AA. The partnership agreement provides for the profit and loss ratio and capital interest of 60% to MM and 40% to AA with AA’s capital as base. How much cash must MM invest to bring the partner's capital balances proportionate to their profit and loss ratio?
As of July 1, 2020, MM and AA decided to form a partnership. Their balance sheets on this date are: MM AA Cash P 15,000 P 38,000 Accounts Receivable 680,000 255,000 Allowance for doubtful accounts (140,000) (30,000) Merchandise Inventory - 202,000 Machinery and Equipment 150,000 270,000 Total P705,000 P735,000 Accounts Payable 135,000 240,000 MM, capital 570,000 AA, capital - 495,000 Total P705,000 P735,000 The partners agreed that the machinery and equipment of MM is under depreciated by P15,000 and that ofAA by P45,000. Allowances for doubtful accounts is to be set up amounting to P120,000 for MM andP40,000 for AA. The partnership agreement provides for the profit and loss ratio and capital interest of60% to MM and 40% to AA with AA’s capital as base. How much cash must MM invest to bring the partner's capital balances proportionate to their profit and loss ratio?
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