FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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  1. The following is the condensed balance sheet of the partnership Jo, Li and Bi who share profits and losses in the ratio of 4:3:3.

 

            Cash                P    180,000                 Accounts, payable      P    420,000

            Other assets       1,660,000                 Bi, Loan                              60,000

            Jo, receivable          40,000                 Jo, Capital                         620,000

                                                                        Li, Capital                         400,000

                                                    __                Bi, Capital                        380,000

            Total               P 1,880,000                 Total                           P1,880,000

 

Assume that the assets and liabilities are fairly valued on the balance Sheet and the partnership decides to admit Mac as a new partner, with a 20% interest. No goodwill or bonus is to be recorded. How much Mac should contribute in cash or other assets?

a. P 350,000

b. P 280,000

c .P 355,000

d. P 284,000

 

please help me understand my activity and I hope you include the computations so that I can understand

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