A and B decided to form a partnership on January I, 2021. Their Statements of Financial Position on this date were: A B Cash 62,625 164,063 Accounts Receivable 1,487,500 896,875 Merchandise Inventory 875,000 885,938 Equipment 656,250 1,268,750 Total 3,084,375 3,215,625 A B Accounts payable 459,375 1,159,375 A, Capital 2,625,000 B, Capital 2,056,250 Total 3,084,375 3,215,625 They agreed the following adjustments shall be made: - Equipment of A is under depreciated by P87,500 and that B is over depreciated by P131,250. - Allowance for doubtful accounts is to be set up amounting to P297,500 for A and P196,875 for B. - Inventories of P21, 875 and P15,312 are worthless in the books of A and B respectively. - The partnership agreement provides for a profit and loss ratio of 70% to A and 30% to B Upon the formation of the partnership, how much is the capital of A and B, respectively?
A and B decided to form a partnership on January I, 2021. Their Statements of Financial Position on this date were: A B Cash 62,625 164,063 Accounts Receivable 1,487,500 896,875 Merchandise Inventory 875,000 885,938 Equipment 656,250 1,268,750 Total 3,084,375 3,215,625 A B Accounts payable 459,375 1,159,375 A, Capital 2,625,000 B, Capital 2,056,250 Total 3,084,375 3,215,625 They agreed the following adjustments shall be made: - Equipment of A is under depreciated by P87,500 and that B is over depreciated by P131,250. - Allowance for doubtful accounts is to be set up amounting to P297,500 for A and P196,875 for B. - Inventories of P21, 875 and P15,312 are worthless in the books of A and B respectively. - The partnership agreement provides for a profit and loss ratio of 70% to A and 30% to B Upon the formation of the partnership, how much is the capital of A and B, respectively?
Chapter10: Partnerships: Formation, Operation, And Basis
Section: Chapter Questions
Problem 39P
Related questions
Question
A and B decided to form a
Financial Position
| A | B | |
| Cash | 62,625 | 164,063 |
| 1,487,500 | 896,875 | |
| Merchandise Inventory | 875,000 | 885,938 |
| Equipment | 656,250 | 1,268,750 |
| Total | 3,084,375 | 3,215,625 |
| A | B | |
| Accounts payable | 459,375 | 1,159,375 |
| A, Capital | 2,625,000 | |
| B, Capital | 2,056,250 | |
| Total | 3,084,375 | 3,215,625 |
They agreed the following adjustments shall be made:
- Equipment of A is under
P131,250.
- Allowance for doubtful accounts is to be set up amounting to P297,500 for A and
P196,875 for B.
- Inventories of P21, 875 and P15,312 are worthless in the books of A and B
respectively.
- The partnership agreement provides for a
to B
Upon the formation of the partnership, how much is the capital of A and B,
respectively?
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