On January 1, 2017, Len, May and Nancy decided to form a business partnership to operate supermarkets. Len and May both owned a grocery business with the Statements of Financial Position as of December 31, 2016 LÊN MAY Cash P 10M 20M Accounts receivable 20 30 Inventories 70 40 Property, Plant and Equipment 50 10 Accounts payable 40 20 Notes payable 10%, 5%, respectively 30 50 Capital 8OM 30M The following additional notes are provided: Len and May will contribute all its assets and liabilities to the newły formed partnership; b. The parties agree to provide 10% and 20% allowance for bad debts to the accounts receivable of Len and May, respectively C. The inventories of Len and May are reported at historical cost and have net realizable value of P 60M and 45M respectively d. The PPE of Len and May have not been depreciated and should be depreciated by 40% and 30% respectively; The interest payable on both notes payable were unrecorded and unpaid since the date of the e. contract. Len's note payable is dated April 1, 2016 while May's note payable is dated June 30, 2016; f. Nancy shall have 20% interest in the partnership upon contribution of sufficient cash. What is the amount of cash to be contributed by Nancy on January 1, 2017? P 16,375,000 b. P 17,625,000 P 15,825,000 d. P 18,475,000
On January 1, 2017, Len, May and Nancy decided to form a business partnership to operate supermarkets. Len and May both owned a grocery business with the Statements of Financial Position as of December 31, 2016 LÊN MAY Cash P 10M 20M Accounts receivable 20 30 Inventories 70 40 Property, Plant and Equipment 50 10 Accounts payable 40 20 Notes payable 10%, 5%, respectively 30 50 Capital 8OM 30M The following additional notes are provided: Len and May will contribute all its assets and liabilities to the newły formed partnership; b. The parties agree to provide 10% and 20% allowance for bad debts to the accounts receivable of Len and May, respectively C. The inventories of Len and May are reported at historical cost and have net realizable value of P 60M and 45M respectively d. The PPE of Len and May have not been depreciated and should be depreciated by 40% and 30% respectively; The interest payable on both notes payable were unrecorded and unpaid since the date of the e. contract. Len's note payable is dated April 1, 2016 while May's note payable is dated June 30, 2016; f. Nancy shall have 20% interest in the partnership upon contribution of sufficient cash. What is the amount of cash to be contributed by Nancy on January 1, 2017? P 16,375,000 b. P 17,625,000 P 15,825,000 d. P 18,475,000
Chapter12: S Corporations
Section: Chapter Questions
Problem 1TRP
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kindly answer the no.4 question only. thank you
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On January 1, 2017, Len, May and Nancy decided to form a business partnership to operate supermarkets.
Len and May both owned a grocery business with the Statements of Financial Position as of December 31,
2016
LEN
MAY
Cash
P
10M
P
20M
Accounts receivable
20
30
Inventories
70
40
Property, Plant and Equipment
50
10
Accounts payable
Notes payable
40
20
10%, 5%, respectively
30
50
Capital
8OM
зом
The following additional notes are provided:
Len and May will contribute all its assets and liabilities to the newly formed partnership;
b.
The parties agree to provide 10% and 20% allowance for bad debts to the accounts receivable of
Len and May, respectively
C.
The inventories of Len and May are reported at historical cost and have net realizable value of
P 60M and 45M respectively
d.
The PPE of Len and May have not been depreciated and should be depreciated by 40% and 30%
respectively;
e.
The interest payable on both notes payable were unrecorded and unpaid since the date of the
contract. Len's note payable is dated April 1, 2016 while May's note payable is dated June 30, 2016;
f.
Nancy shall have 20% interest in the partnership upon contribution of sufficient cash.
What is the amount of cash to be contributed by Nancy on January 1, 2017?
P 16,375,000
b. P 17,625,000
P 15,825,000
d. P 18,475,000
a
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