3. How much capital will be credited to Cindy?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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3. How much capital will be credited to Cindy?
Transcribed Image Text:Problem I
Ariel, Beauty and Cindy decided to form Disprin Partnership with 2:2:1 profit sharing. Both Ariel and Beauty have existing business.
The balance sheet of the two are shown below together with their agreement prior to formation.
Ariel
Beauty
Cash
117
126
Accounts Receivables
100
200
Inventories
50
30
Equipment
80
Furniture
30
Prepayments
15
ТOTAL
352
401
Accounts Payable
Capital
75
95
277
306
TOTAL
352
401
Partners' agreements:
Receivables are 97% collectible
Ariel's inventories fair values is at P55 while P10 of Beauty's Inventories were damaged and are only 30% recoverable.
The equipment is underdepreciated by P3 and the furniture's value will increase by P4.
P2 of Ariel's prepayments were already exhausted while Beauty has unrecorded liability of P7.
Cindy will contribute sufficient cash to give her 20% interest
1. How much capital will be credited to Ariel?
2. How much capital will be credited to Beauty?
3. How much capital will be credited to Cindy?
4. How much is the total assets of the newly-formed partnership?
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