12. In the AD partnership, Allen's capital is P140,000 and Daniel's is P40,000 and they share income in a 3:1 ratio, respectively. They decide to admit David to the partnership. Allen and Daniel agree that some of the inventory is obsolete. The inventory account is decreased before David is admitted.
12. In the AD partnership, Allen's capital is P140,000 and Daniel's is P40,000 and they share income in a 3:1 ratio, respectively. They decide to admit David to the partnership. Allen and Daniel agree that some of the inventory is obsolete. The inventory account is decreased before David is admitted.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Transcribed Image Text:12. In the AD partnership, Allen's capital
is P140,000 and Daniel's is P40,000
and they share income in a 3:1 ratio,
respectively. They decide to admit
David to the partnership. Allen and
Daniel agree that some of the inventory
is obsolete. The inventory account is
decreased before David is admitted.
David directly purchases a one-fifth
interest by paying Allen P34,000 and
Daniel P10,000. The land account is
increased before David is admitted. By
what amount is the land account
increased? *
O a. P 40,000
О Б.Р36,000
O c. P 20,000
O d. P 10,000
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