Marie admits Neri as a partner in business. Just before the partnership's formation, Marie's books showed the following: Cash 2,600 Accounts Receivable 12,000 Merchandise Inventory 18,000 Accounts Payable 6,200 Marie, Capital 26,400 It was agreed that, for purposes of establishing Marie's investment in the firm, the following adjustments shall be reflected: 1. Allowance for bad debts of 2% should be set up 2. Merchandise Inventory should be valued at P20,200 3. Prepaid expenses of P350 and accrued expenses of P400 should be recognized. How much cash should Neri invest to secure a 1/3 interest in the partnership?
Partnership Accounting
A partnership is a kind of arrangement between two or more people whereby they agree to manage the business operations and share its profits and losses in an agreed ratio between them. The agreement that is drafted and signed by the partners of the firm is termed as partnership deed and contains various important clauses agreed between the partners such as profit/loss sharing, interest on capital, remuneration allocation of each partner, drawings, admission of a new partner, etc.
Partner Admission and Withdrawal
A partnership is a kind of arrangement between two or more people whereby they agree to manage the business operations and share its profits and losses in an agreed ratio between them. The agreement that is drafted and signed by the partners of the firm is termed as a partnership deed and contains various important clauses agreed between the partners such as profit/loss sharing, interest on capital, remuneration allocation of each partner, drawings of a partner, etc.
Marie admits Neri as a partner in business. Just before the partnership's formation, Marie's books showed the following:
Cash
2,600
12,000
Merchandise Inventory
18,000
Accounts Payable
6,200
Marie, Capital
26,400
It was agreed that, for purposes of establishing Marie's investment in the firm, the following adjustments shall be reflected:
1. Allowance for
2. Merchandise Inventory should be valued at P20,200
3. Prepaid expenses of P350 and accrued expenses of P400 should be recognized.
How much cash should Neri invest to secure a 1/3 interest in the partnership?
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