On May 1, 2022, Carlo has been in a trading business for five years as a sole proprietor. He needed additional capital to fund business expansion so he decided to invite Jamie by investing cash for a one-third interest in the new partnership, CABLES Trading. CABLES Trading would assume the liabilities of Carlo's business. Jamie accepted the invitation and both agreed to revalue assets of Carlo's business as itemized: Accounts Receivable P50,000; Merchandise Inventory P28,000; Office Equipment P22,000; and Land P279,000. Account balances in the books of Carlo were as follows: Account Titles Debit Credit Cash Accounts Receivable Allowance for Doubtful Accounts Merchandise 25,000 Inventory Office Equipment 33,000 Accumulated 15,000 Depreciation Land 260,000 Accounts Payable 194,000 Carlo, Capital 300,000 How much is the capital of CABLES Trading upon formation? P135,000 60,000 P 4,000
On May 1, 2022, Carlo has been in a trading business for five years as a sole proprietor. He needed additional capital to fund business expansion so he decided to invite Jamie by investing cash for a one-third interest in the new partnership, CABLES Trading. CABLES Trading would assume the liabilities of Carlo's business. Jamie accepted the invitation and both agreed to revalue assets of Carlo's business as itemized: Accounts Receivable P50,000; Merchandise Inventory P28,000; Office Equipment P22,000; and Land P279,000. Account balances in the books of Carlo were as follows: Account Titles Debit Credit Cash Accounts Receivable Allowance for Doubtful Accounts Merchandise 25,000 Inventory Office Equipment 33,000 Accumulated 15,000 Depreciation Land 260,000 Accounts Payable 194,000 Carlo, Capital 300,000 How much is the capital of CABLES Trading upon formation? P135,000 60,000 P 4,000
Chapter11: Property Dispositions
Section: Chapter Questions
Problem 53P
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Transcribed Image Text:On May 1, 2022, Carlo has been in a trading business for five years as a sole proprietor.
He needed additional capital to fund business expansion so he decided to invite Jamie by
investing cash for a one-third interest in the new partnership, CABLES Trading.
CABLES Trading would assume the liabilities of Carlo's business.
Jamie accepted the invitation and both agreed to revalue assets of Carlo's business as
itemized: Accounts Receivable P50,000; Merchandise Inventory P28,000; Office Equipment
P22,000; and Land P279,000.
Account balances in the books of Carlo were as follows:
Account Titles
Debit Credit
Cash
Accounts
Receivable
Allowance for
Doubtful Accounts
Merchandise
25,000
Inventory
Office Equipment 33,000
Accumulated
15,000
Depreciation
Land
260,000
Accounts Payable
194,000
Carlo, Capital
300,000
How much is the capital of CABLES Trading upon formation?
P135,000
60,000
P 4,000
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