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. Bis 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. Bis 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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![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.
o 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.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F6593e090-7919-4ca5-9b4f-b85c7db31238%2Ffe7434ef-ece4-4eec-a873-7e4e0f13e75b%2Fvun7yx4_processed.png&w=3840&q=75)
Transcribed Image Text: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.
o 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.
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