As of July 1, 2020, MM and AA decided to form a partnership. Their balance sheets on this date are: CashAccounts ReceivableAllowance for doubtful accountsMerchandise InventoryMachinery and EquipmentTotal P705,000MMAAP 38,000 255,000 (30,000) 202,000 270,000 P735,000240,000495,000 P735,000P 15,000 680,000 (140,000) - 150,000 Accounts PayableMM, capitalAA, capitalTotal P705,000135,000 570,000 - The partners agreed that the machinery and equipment of MM is under depreciated by P15,000 and that of AA by P45,000. Allowances for doubtful accounts is to be set up amounting to P120,000 for MM and P40,000 for AA. The partnership agreement provides for the profit and loss ratio and capital interest of 60% to MM and 40% to AA with AA’s capital as base. How much cash must MM invest to bring the partner's capital balances proportionate to their profit and loss ratio? As of July 1, 2020, MM and AA decided to form a partnership. Their balance sheets on this date are:MMAAP 15,000680,000(140,000)P 38,000255,000(30,000)202,000CashAccounts ReceivableAllowance for doubtful accountsMerchandise InventoryMachinery and Equipment150,000P705,000270,000P735,000Total135,000570,000240,000Accounts Payableмм, саpitalAA, capitalTotal495,000P705,000P735,000The partners agreed that the machinery and equipment of MM is under depreciated by P15,000 and that of AAby P45,000. Allowances for doubtful accounts is to be set up amounting to P120,000 for MM and P40,000 forAA. The partnership agreement provides for the profit and loss ratio and capital interest of 60% to MMand 40% to AA with AA's capital as base. How much cash must MM invest to bring the partner's capitalbalances proportionate to their profit and loss ratio?

(a) Revaluation account : (b) Closing Capital Balances after Revaluation :

Answered: As of July 1, 2020, MM and AA decided…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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As of July 1, 2020, MM and AA decided to form a partnership. Their balance sheets on this date are: Cash Accounts Receivable Allowance for doubtful accounts Merchandise Inventory Machinery and Equipment Total P705,000 MM AA P 38,000 255,000 (30,000) 202,000 270,000 P735,000 240,000 495,000 P735,000 P 15,000 680,000 (140,000) - 150,000 Accounts Payable MM, capital AA, capital Total P705,000 135,000 570,000 - The partners agreed that the machinery and equipment of MM is under depreciated by P15,000 and that of AA by P45,000. Allowances for doubtful accounts is to be set up amounting to P120,000 for MM and P40,000 for AA. The partnership agreement provides for the profit and loss ratio and capital interest of 60% to MM and 40% to AA with AA’s capital as base. How much cash must MM invest to bring the partner's capital balances proportionate to their profit and loss ratio?

As of July 1, 2020, MM and AA decided to form a partnership. Their balance sheets on this date are:
MM
AA
P 15,000
680,000
(140,000)
P 38,000
255,000
(30,000)
202,000
Cash
Accounts Receivable
Allowance for doubtful accounts
Merchandise Inventory
Machinery and Equipment
150,000
P705,000
270,000
P735,000
Total
135,000
570,000
240,000
Accounts Payable
мм, саpital
AA, capital
Total
495,000
P705,000
P735,000
The partners agreed that the machinery and equipment of MM is under depreciated by P15,000 and that of AA
by P45,000. Allowances for doubtful accounts is to be set up amounting to P120,000 for MM and P40,000 for
AA. The partnership agreement provides for the profit and loss ratio and capital interest of 60% to MM
and 40% to AA with AA's capital as base. How much cash must MM invest to bring the partner's capital
balances proportionate to their profit and loss ratio?

Definition Definition Arrangement between two or more people whereby they agree to manage business operations and share its profits and losses in an agreed ratio. The agreement drafted and signed by the partners of the firm is termed as a partnership deed and contains various important clauses agreed between the partners such as profit/loss sharing, interest on capital, remuneration allocation of each partner, and drawings of a partner.

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