Red, White and Blue are partners in a business, and in its profits at the respective ratio of 5:3:2. On January 3, 2020, they admit Green, who is to invest in the firm sufficient cash to have a orne-third interest in the partnership capital and profits. The following trial balance is taken from the original partnership's records: Red, White and Blue Trial Balance Debit P 100,000 75,000 225,000 Credit Cash Marketable securities Accounts receivable Accounts payable Red, Capital White, Capital Blue, Capital P 80,000 175,000 100,000 45,000 Total P 400,000 P 400,000 The securities have a market value of P50,000, and an allowance of P25,000 was expected to cover collection losses on the receivables. No other adjustments of the net assets are considered necessary: however, the three partners among themselves must bring the balance in their capital accounts into agreement with their interest in profits. What amount must be invested by Green?
Red, White and Blue are partners in a business, and in its profits at the respective ratio of 5:3:2. On January 3, 2020, they admit Green, who is to invest in the firm sufficient cash to have a orne-third interest in the partnership capital and profits. The following trial balance is taken from the original partnership's records: Red, White and Blue Trial Balance Debit P 100,000 75,000 225,000 Credit Cash Marketable securities Accounts receivable Accounts payable Red, Capital White, Capital Blue, Capital P 80,000 175,000 100,000 45,000 Total P 400,000 P 400,000 The securities have a market value of P50,000, and an allowance of P25,000 was expected to cover collection losses on the receivables. No other adjustments of the net assets are considered necessary: however, the three partners among themselves must bring the balance in their capital accounts into agreement with their interest in profits. What amount must be invested by Green?
SWFT Essntl Tax Individ/Bus Entities 2020
23rd Edition
ISBN:9780357391266
Author:Nellen
Publisher:Nellen
Chapter14: Partnerships And Limited Liability Entities
Section: Chapter Questions
Problem 2BD
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Transcribed Image Text:Red, White and Blue are partners ina business, and in its profits at the respective ratio of 5:3:2. On January 3, 2020,
they admit Green, who is to invest in the firm sufficient cash to have a one-third interest in the partnership capital
and profits. The following trial balance is taken from the original partnership's records:
Red, White and Blue
Trial Balance
Debit
Credit
P 100,000
Cash
Marketable securities
Accounts receivable
75,000
225,000
P 80,000
Accounts payable
Red, Capital
White, Capital
Blue, Capital
175,000
100,000
45,000
Total
P 400,000
P 400,000
The securities have a market value of P50,000, and an allowance of P25,000 was expected to cover collection
losses on the receivables. No other adjustments of the net assets are considered necessary: however, the three
partners among themselves must bring the balance in their capital accounts into agreement with their interest in
profits. What amount must be invested by Green?
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