How much is BBM investment
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Leni admits BBM as a partner in the business. Balance Sheet accounts of Leni on September 30, just
before admission show:
Cash - 31,200
Accounts Receivable - 144,000
Inventory - 216,000
Accounts Payable - 74,400
Leni, Capital - 316,800
It is agreed that for purposes of establishing Leni's interest, the following adjustments shall be made:
a. An allowance for doubtful accounts of 2% is to be established.
b. Inventory is to be valued at 242,400
c. Prepaid Expenses of 4,200 and accrued expenses of 4,800 are to be recognized.
BBM is to invest sufficient cash to obtain 1/3 interest in the partnership. How much is BBM investment
in the partnership?
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