A admits B as partner in business. Accounts in the ledger for A on October 31, 2020, just before the admission of B show the following balances: Cash: P50,000 Accounts receivable: 110,000 Notes receivable: 20,000 Inventories: 50,000 Accounts payable: 30,000 It is agreed that for the purposes of establishing A's interest, the following adjustments shall be made: An allowance for doubtful accounts of 5% of accounts receivable is to be established. An inventory amounting to P10,000 is worthless. Prepaid expenses of P1,000 and accrued expense of P2,000 are to be recognized. An interest of 10% on notes receivable amounting P10,000 dated April 30, 2020 is to be accrued. B is to invest sufficient cash to obtain a 1/4 interest in the Partnership. Determine the amount of cash investment by Partner B.
A admits B as partner in business. Accounts in the ledger for A on October 31, 2020, just before the admission of B show the following balances: Cash: P50,000 Accounts receivable: 110,000 Notes receivable: 20,000 Inventories: 50,000 Accounts payable: 30,000 It is agreed that for the purposes of establishing A's interest, the following adjustments shall be made: An allowance for doubtful accounts of 5% of accounts receivable is to be established. An inventory amounting to P10,000 is worthless. Prepaid expenses of P1,000 and accrued expense of P2,000 are to be recognized. An interest of 10% on notes receivable amounting P10,000 dated April 30, 2020 is to be accrued. B is to invest sufficient cash to obtain a 1/4 interest in the Partnership. Determine the amount of cash investment by Partner B.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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18
A admits B as partner in business. Accounts in the ledger for A on October 31, 2020, just before the admission of B show the following balances:
Cash: P50,000
Notes receivable: 20,000
Inventories: 50,000
Accounts payable: 30,000
It is agreed that for the purposes of establishing A's interest, the following adjustments shall be made:
- An allowance for doubtful accounts of 5% of accounts receivable is to be established.
- An inventory amounting to P10,000 is worthless.
- Prepaid expenses of P1,000 and accrued expense of P2,000 are to be recognized.
- An interest of 10% on notes receivable amounting P10,000 dated April 30, 2020 is to be accrued.
B is to invest sufficient cash to obtain a 1/4 interest in the
Determine the amount of cash investment by Partner B.
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