Jennifer has been very successful in operating her business for the last five years. Her financial statements showed total assets of P380,000 and liabilities of P30,000. She invited Nicole to join her by investing an amount enough to give her a 40% interest in the firm. Profit and loss agreement provides 60:40 to Jennifer and Nicole, respectively. Before the formation, the parties agreed to make the following adjustments in the books of Jennifer: ➢ Allowance for doubtful accounts amounting to P5,000 be established. ➢ The merchandise should be adjusted to include goods out on consignment amounting to P20,000. ➢ Accrued utilities be recognized, P5,000. The amount to be invested by Nicole is
Jennifer has been very successful in operating her business for the last five years. Her financial statements showed total assets of P380,000 and liabilities of P30,000. She invited Nicole to join her by investing an amount enough to give her a 40% interest in the firm. Profit and loss agreement provides 60:40 to Jennifer and Nicole, respectively. Before the formation, the parties agreed to make the following adjustments in the books of Jennifer: ➢ Allowance for doubtful accounts amounting to P5,000 be established. ➢ The merchandise should be adjusted to include goods out on consignment amounting to P20,000. ➢ Accrued utilities be recognized, P5,000. The amount to be invested by Nicole is
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Jennifer has been very successful in operating her business for the last five years. Her financial statements showed total assets of P380,000 and liabilities of P30,000. She invited Nicole to join her by investing an amount enough to give her a 40% interest in the firm. Profit and loss agreement provides 60:40 to Jennifer and Nicole, respectively.
Before the formation, the parties agreed to make the following adjustments in the books of Jennifer:
➢ Allowance for doubtful accounts amounting to P5,000 be established.
➢ The merchandise should be adjusted to include goods out on consignment amounting to P20,000.
➢ Accrued utilities be recognized, P5,000.
The amount to be invested by Nicole is
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