On April 30, 2020, Mendez admits Lopez for an interest in his business. On this date, Mendez's capital account shows a balance of P 158,400. The following were agreed upon before the formation of the partnership: Prepaid expenses of P17,500 and accrued expenses of P5,000 are to be recognized. 5% of the outstanding accounts receivable of Lopez amounting to P100,000 is to be recognized as uncollectible. Lopez is to be credited with a one-third interest in the partnership and is to invest cash aside from the P50,000 worth of merchandise. Determine the amount of cash to be invested by Lopez: 35,000 O 82,950 O 55,300 O 32,950
On April 30, 2020, Mendez admits Lopez for an interest in his business. On this date, Mendez's capital account shows a balance of P 158,400. The following were agreed upon before the formation of the partnership: Prepaid expenses of P17,500 and accrued expenses of P5,000 are to be recognized. 5% of the outstanding accounts receivable of Lopez amounting to P100,000 is to be recognized as uncollectible. Lopez is to be credited with a one-third interest in the partnership and is to invest cash aside from the P50,000 worth of merchandise. Determine the amount of cash to be invested by Lopez: 35,000 O 82,950 O 55,300 O 32,950
SWFT Essntl Tax Individ/Bus Entities 2020
23rd Edition
ISBN:9780357391266
Author:Nellen
Publisher:Nellen
Chapter4: Gross Income
Section: Chapter Questions
Problem 28P
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Question
Transcribed Image Text:On April 30, 2020, Mendez admits Lopez for an interest in his business. On this date,
Mendez's capital account shows a balance of P 158,400. The following were agreed upon
before the formation of the partnership:
Prepaid expenses of P17,500 and accrued expenses of P5,000 are to be recognized.
5% of the outstanding accounts receivable of Lopez amounting to P100,000 is to be
recognized as uncollectible.
Lopez is to be credited with a one-third interest in the partnership and is to invest cash aside
from the P50,000 worth of merchandise. Determine the amount of cash to be invested by
Lopez:
35,000
82,950
55,300
32,950
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