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How much cash should Catherine invest to give her 70% interest in the partnership?

How much cash should Catherine invest to give her 70% interest in the partnership?

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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2. Therese admits Catherine as a partner in her business. Accounts in the ledgers of Therese on June 1, 20YY just prior to the admission of Catherine show the following balances: Cash Accounts Receivable Merchandise Inventory Notes Payable Accounts Payable Therese, Capital It is agreed that for purposes of establishing Therese's interest, the following adjustments shall be made: a. Only 95% of the total accounts receivable is ascertained to be collectible. P 15,000 30,000 75,000 5,000 10,000 105,000 b. The merchandise inventory is to be valued at P81,000. c. Prepaid expenses of P 6,500 and interest expense of P500 on the note issued by Therese are to be recognized. How much cash should Catherine invest to give her 70% interest in the partnership?
Transcribed Image Text:2. Therese admits Catherine as a partner in her business. Accounts in the ledgers of Therese on June 1, 20YY just prior to the admission of Catherine show the following balances: Cash Accounts Receivable Merchandise Inventory Notes Payable Accounts Payable Therese, Capital It is agreed that for purposes of establishing Therese's interest, the following adjustments shall be made: a. Only 95% of the total accounts receivable is ascertained to be collectible. P 15,000 30,000 75,000 5,000 10,000 105,000 b. The merchandise inventory is to be valued at P81,000. c. Prepaid expenses of P 6,500 and interest expense of P500 on the note issued by Therese are to be recognized. How much cash should Catherine invest to give her 70% interest in the partnership?
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