M and N admits O as a new partner. The partnership statement of financial position immediately before the admission of C is shown below: Cash Accounts Receivable Inventory Total Assets 28,000 118,000 187,000 333,000 Accounts Payable M, Capital (70%) N, Capital (30%) Total Liabilities & Equity 65,000 172,000 96,000 333,000 The following adjustments are determined: a. The recoverable amount of the account receivable is P117,401. b. A P30,000 recovery of a previous write-down on the inventory should be recognized. c. Prepaid assets of P 4,600 and accrued liabilities of P 6,000 should be recognized. Case # 1:0 acquires half of N's interest for P 120,000. Case # 2:O invests P 81,250 cash to the partnership in exchange for a 25% interest. Case # 2, Scenario A: O's capital account is credited for the fair value of the 25% interest he acquired. Case # 2, Scenario B: O's capital account is credited for P 100,000. For items 16-18, refer to Case #1 16. How much is the balance of M's capital account after O's admission? a. P 191,600.70 b. P 192,600.70 c. P 193,600.80 d. P 194,600 17. How much is the balance of N's capital account after O's admission? а. Р 62, 200. 15 b. Р52,200.15 c. P 52,201.15 d. P 62, 201.15

M and N admits O as a new partner. The partnership statement of financial position immediately before the admission of C is shown below: Cash Accounts Receivable Inventory Total Assets 28,000 118,000 187,000 333,000 Accounts Payable M, Capital (70%) N, Capital (30%) Total Liabilities & Equity 65,000 172,000 96,000 333,000 The following adjustments are determined: a. The recoverable amount of the account receivable is P117,401. b. A P30,000 recovery of a previous write-down on the inventory should be recognized. c. Prepaid assets of P 4,600 and accrued liabilities of P 6,000 should be recognized. Case # 1:0 acquires half of N's interest for P 120,000. Case # 2:O invests P 81,250 cash to the partnership in exchange for a 25% interest. Case # 2, Scenario A: O's capital account is credited for the fair value of the 25% interest he acquired. Case # 2, Scenario B: O's capital account is credited for P 100,000. For items 16-18, refer to Case #1 16. How much is the balance of M's capital account after O's admission? a. P 191,600.70 b. P 192,600.70 c. P 193,600.80 d. P 194,600 17. How much is the balance of N's capital account after O's admission? а. Р 62, 200. 15 b. Р52,200.15 c. P 52,201.15 d. P 62, 201.15

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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