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: 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?
College Accounting, Chapters 1-27
23rd Edition
ISBN:9781337794756
Author:HEINTZ, James A.
Publisher:HEINTZ, James A.
Chapter19: Accounting For Partnerships
Section: Chapter Questions
Problem 5CE
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Question
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?
Transcribed Image Text:As of July 1, 2020, MM and AA decided to form a partnership. Their balance sheets on this date are:
MM
AA
P 15,000
680,000
(140,000)
P 38,000
255,000
(30,000)
202,000
Cash
Accounts Receivable
Allowance for doubtful accounts
Merchandise Inventory
Machinery and Equipment
150,000
P705,000
270,000
P735,000
Total
135,000
570,000
240,000
Accounts Payable
мм, саpital
AA, capital
Total
495,000
P705,000
P735,000
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?
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