Juan and Pedro are proprietors who decided to combine their business. On June 1, Juan and Pedro showed the following on their books: Juan Assets – P 300,000 Liabilities – P 100,000 Pedro Assets – P 150,000 Liabilities – P 50,000 Upon assessment, it was determined that each partner should recognize an allowance for bad debts amounting to P 10,000. Noncurrent assets of Pedro were over depreciated by P 20,000. Some liabilities pertaining to accruals were not yet recognized in the books. Juan failed to recognize salary expenses amounting to P 15,000 and Pedro did not include accrual for electricity bill amounting to P 5,000. After formation of the partnership, how much is the net assets of the company?
Juan and Pedro are proprietors who decided to combine their business. On June 1, Juan and Pedro showed the following on their books: Juan Assets – P 300,000 Liabilities – P 100,000 Pedro Assets – P 150,000 Liabilities – P 50,000 Upon assessment, it was determined that each partner should recognize an allowance for bad debts amounting to P 10,000. Noncurrent assets of Pedro were over depreciated by P 20,000. Some liabilities pertaining to accruals were not yet recognized in the books. Juan failed to recognize salary expenses amounting to P 15,000 and Pedro did not include accrual for electricity bill amounting to P 5,000. After formation of the partnership, how much is the net assets of the company?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Juan and Pedro are proprietors who decided to combine their business. On June 1, Juan and Pedro showed the following on their books:
Juan
Assets – P 300,000
Liabilities – P 100,000
Pedro
Assets – P 150,000
Liabilities – P 50,000
Upon assessment, it was determined that each partner should recognize an allowance for
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