Homework Help is Here – Start Your Trial Now!
Business
Accounting
As of July 1, 2020, MM and AA decided to form a partnership. Their balance sheets on this date are: MM AA Cash Accounts receivable Allowance for doubtful accounts 15,000.00 680,000.00 (140,000.00) 38,000.00 255,000.00 (30,000.00) 202,000.00 270,000.00 735,000.00 Merchandise Inventory Machinery and Equipment Total 150,000.00 705,000.00 Accounts payable MM, Capital AA, Capital Total 135,000.00 570,000.00 240,000.00 495,000.00 735,000.00 705,000.00 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 proft 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 Accounts receivable Allowance for doubtful accounts 15,000.00 680,000.00 (140,000.00) 38,000.00 255,000.00 (30,000.00) 202,000.00 270,000.00 735,000.00 Merchandise Inventory Machinery and Equipment Total 150,000.00 705,000.00 Accounts payable MM, Capital AA, Capital Total 135,000.00 570,000.00 240,000.00 495,000.00 735,000.00 705,000.00 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 proft 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?

Accounting (Text Only)
Accounting (Text Only)
26th Edition
ISBN:9781285743615
Author:Carl Warren, James M. Reeve, Jonathan Duchac
Publisher:Carl Warren, James M. Reeve, Jonathan Duchac
Chapter12: Accounting For Partnerships And Limited Liability Companies
Section: Chapter Questions
Problem 12.3BPR
See similar textbooks
icon
Related questions
Question
Problem 5 As of July 1, 2020, MM and AA decided to form a partnership. Their balance sheets on this date are: MM AA 15,000.00 680,000.00 (140,000.00) Cash 38,000.00 255,000.00 (30,000.00) 202,000.00 270,000.00 735,000.00 Accounts receivable Allowance for doubtful accounts Merchandise Inventory Machinery and Equipment Total 150,000.00 705,000.00 Accounts payable MМ, Сaptal AA, Capital Total 135,000.00 570,000.00 240,000.00 495,000.00 735,000.00 705,000.00 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 proft 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:Problem 5 As of July 1, 2020, MM and AA decided to form a partnership. Their balance sheets on this date are: MM AA 15,000.00 680,000.00 (140,000.00) Cash 38,000.00 255,000.00 (30,000.00) 202,000.00 270,000.00 735,000.00 Accounts receivable Allowance for doubtful accounts Merchandise Inventory Machinery and Equipment Total 150,000.00 705,000.00 Accounts payable MМ, Сaptal AA, Capital Total 135,000.00 570,000.00 240,000.00 495,000.00 735,000.00 705,000.00 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 proft 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?
Expert Solution
steps

Step by step

Solved in 2 steps with 1 images

SEE SOLUTIONCheck out a sample Q&A here
Blurred answer
Knowledge Booster
Partners and Partnerships
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Recommended textbooks for you
Accounting (Text Only)
Accounting (Text Only)
Accounting
ISBN:
9781285743615
Author:
Carl Warren, James M. Reeve, Jonathan Duchac
Publisher:
Cengage Learning
Financial Accounting: The Impact on Decision Make…
Financial Accounting: The Impact on Decision Make…
Accounting
ISBN:
9781305654174
Author:
Gary A. Porter, Curtis L. Norton
Publisher:
Cengage Learning
College Accounting, Chapters 1-27
College Accounting, Chapters 1-27
Accounting
ISBN:
9781337794756
Author:
HEINTZ, James A.
Publisher:
Cengage Learning,
Financial Accounting
Financial Accounting
Accounting
ISBN:
9781337272124
Author:
Carl Warren, James M. Reeve, Jonathan Duchac
Publisher:
Cengage Learning
Century 21 Accounting General Journal
Century 21 Accounting General Journal
Accounting
ISBN:
9781337680059
Author:
Gilbertson
Publisher:
Cengage
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
SEE MORE TEXTBOOKS