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Beomgyu, Yeonjun, and Soobin were all successful entrepreneurs. They believed that once they pulled their resources together and with their combined expertise and managerial skills, they can surely beat the existing competitors in the locality. Their respective post-closing
Beomgyu Yeonjun Soobin
Cash 950,000 850,000 750,000
Est. Uncollectible Accounts (3,000) (5,000) (2,000)
Merchandise Inventory 420,000 600,000 450,000
Equipment 350,000 480,000 250,000
Capital 1,607,000 1,785,000 1,298,000
They agreed to comply with the following adjustments:
1. Accounts Receivable should have the following probability of collection:
Beomgyu, 90%: Yeonjun, 95%; Soobin, 98%
2. MErchandise should be revalued at 90% of the book value to provide for obsolence.
3. Equipment should have the carrying values as follows:
Beomgyu, 165,000; Yeonjun, 150,000; Soobin, 180,000
4. Each of the prospective partners should level off their cash contribution to 1,000,000.
Required:
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