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Holden admits Jane for partnership interest in his business. The balance sheet accounts of Holden on December 31, 2019 prior to the admission of Jane are as follows: Cash ? Accounts receivable 100,000 Inventory 150,000 Accounts payable 50,000 Holden, Capital ?   It is agreed that for purposes of establishing Holden’s interest, the following adjustments should be made: An allowance for doubtful accounts of 5% of accounts receivable is to be established The inventory is to be valued at P160,000 Prepaid expense of P5,000 and accrued expense of P4,000 are to be recognized Jane is to invest P115,000 to give her 1/3 interest in the firm. Total assets of the partnership after the formation is? P399,000 P345,000 P395,000 P339,000

Holden admits Jane for partnership interest in his business. The balance sheet accounts of Holden on December 31, 2019 prior to the admission of Jane are as follows: Cash ? Accounts receivable 100,000 Inventory 150,000 Accounts payable 50,000 Holden, Capital ?   It is agreed that for purposes of establishing Holden’s interest, the following adjustments should be made: An allowance for doubtful accounts of 5% of accounts receivable is to be established The inventory is to be valued at P160,000 Prepaid expense of P5,000 and accrued expense of P4,000 are to be recognized Jane is to invest P115,000 to give her 1/3 interest in the firm. Total assets of the partnership after the formation is? P399,000 P345,000 P395,000 P339,000

FINANCIAL ACCOUNTING
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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  1. Holden admits Jane for partnership interest in his business. The balance sheet accounts of Holden on December 31, 2019 prior to the admission of Jane are as follows:

Cash

?

Accounts receivable

100,000

Inventory

150,000

Accounts payable

50,000

Holden, Capital

?

 

It is agreed that for purposes of establishing Holden’s interest, the following adjustments should be made:

  1. An allowance for doubtful accounts of 5% of accounts receivable is to be established
  2. The inventory is to be valued at P160,000
  • Prepaid expense of P5,000 and accrued expense of P4,000 are to be recognized

Jane is to invest P115,000 to give her 1/3 interest in the firm. Total assets of the partnership after the formation is?

  1. P399,000
  2. P345,000
  3. P395,000
  4. P339,000
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