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Michael, Scottie and Steve, owners of existing businesses, decided to form a new partnership. Following are the balances of their assets and liabilities and their agreed adjustments: Cash Accounts Receivable Allowance for Bad debts Merchandise Inventory Prepaid expenses Land Equipment Accumulated depreciation - Equipment Furniture and Fixtures. Accumulated depreciation - Furniture and Fixtures Accounts Payable Utilities Payable Mortgage Payable Capital account Michael Scottie Steve 890,000 1,500,000 60,000 120,000 358,000 155,000 27,000 9,200 420,000 177,000 125,000 9,500 1,000,000 250,000 575,000 100,000 30,000 100,000 15,000 4,500 331,000 98,000 143,000 50,000 96,250 35,000 180,000 90,000 222,000 64,000 109,000 5,000 420,000 1,616,250 3,190,000 408,300 Michael's allowance for bad debts is understated by P3,500; the Merchandise inventory is overstated by P25,000; the accumulated depreciation for the equipment is understated by P20,000. Scottie's allowance for bad debts is overstated by P7,000; Merchandise inventory should be valued at P435,000; and the accounts payable is understated by P18,000. The mortgage payable will be assumed by the partnership. Steve's utilities payable is understated by P25,000. He will also invest additional cash of P500,000. HOW MUCH IS THE TOTAL CAPITAL OF THE NEW PARTNERSHIP? P 5,631,050 P 5,645,050 P 5,145,050 P6.065.050

Michael, Scottie and Steve, owners of existing businesses, decided to form a new partnership. Following are the balances of their assets and liabilities and their agreed adjustments: Cash Accounts Receivable Allowance for Bad debts Merchandise Inventory Prepaid expenses Land Equipment Accumulated depreciation - Equipment Furniture and Fixtures. Accumulated depreciation - Furniture and Fixtures Accounts Payable Utilities Payable Mortgage Payable Capital account Michael Scottie Steve 890,000 1,500,000 60,000 120,000 358,000 155,000 27,000 9,200 420,000 177,000 125,000 9,500 1,000,000 250,000 575,000 100,000 30,000 100,000 15,000 4,500 331,000 98,000 143,000 50,000 96,250 35,000 180,000 90,000 222,000 64,000 109,000 5,000 420,000 1,616,250 3,190,000 408,300 Michael's allowance for bad debts is understated by P3,500; the Merchandise inventory is overstated by P25,000; the accumulated depreciation for the equipment is understated by P20,000. Scottie's allowance for bad debts is overstated by P7,000; Merchandise inventory should be valued at P435,000; and the accounts payable is understated by P18,000. The mortgage payable will be assumed by the partnership. Steve's utilities payable is understated by P25,000. He will also invest additional cash of P500,000. HOW MUCH IS THE TOTAL CAPITAL OF THE NEW PARTNERSHIP? P 5,631,050 P 5,645,050 P 5,145,050 P6.065.050

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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Michael, Scottie and Steve, owners of existing businesses, decided to form a new partnership. Following are the balances of their assets and liabilities and their agreed adjustments: Cash Accounts Receivable Allowance for Bad debts Merchandise Inventory Prepaid expenses Land Equipment Accumulated depreciation - Equipment Furniture and Fixtures Accumulated depreciation - Furniture and Fixtures Accounts Payable Utilities Payable Mortgage Payable Capital account Michael Scottie Steve 890,000 1,500,000 60,000 120,000 358,000 155,000 4,500 27,000 9,200 331,000 420,000 177,000 98,000 125,000 9,500 1,000,000 250,000 575,000 100,000 30,000 100,000 15,000 143,000 180,000 50,000 90,000 96,250 222,000 64,000 35,000 109,000 5,000 420,000 1,616,250 3,190,000 408,300 Michael's allowance for bad debts is understated by P3,500; the Merchandise inventory is overstated by P25,000; the accumulated depreciation for the equipment is understated by P20,000. Scottie's allowance for bad debts is overstated by P7,000; Merchandise inventory should be valued at P435,000; and the accounts payable is understated by P18,000. The mortgage payable will be assumed by the partnership. Steve's utilities payable is understated by P25,000. He will also invest additional cash of P500,000. 0000 HOW MUCH IS THE TOTAL CAPITAL OF THE NEW PARTNERSHIP? P 5,631,050 P 5,645,050 P 5,145,050 P 6,065,050
Transcribed Image Text:Michael, Scottie and Steve, owners of existing businesses, decided to form a new partnership. Following are the balances of their assets and liabilities and their agreed adjustments: Cash Accounts Receivable Allowance for Bad debts Merchandise Inventory Prepaid expenses Land Equipment Accumulated depreciation - Equipment Furniture and Fixtures Accumulated depreciation - Furniture and Fixtures Accounts Payable Utilities Payable Mortgage Payable Capital account Michael Scottie Steve 890,000 1,500,000 60,000 120,000 358,000 155,000 4,500 27,000 9,200 331,000 420,000 177,000 98,000 125,000 9,500 1,000,000 250,000 575,000 100,000 30,000 100,000 15,000 143,000 180,000 50,000 90,000 96,250 222,000 64,000 35,000 109,000 5,000 420,000 1,616,250 3,190,000 408,300 Michael's allowance for bad debts is understated by P3,500; the Merchandise inventory is overstated by P25,000; the accumulated depreciation for the equipment is understated by P20,000. Scottie's allowance for bad debts is overstated by P7,000; Merchandise inventory should be valued at P435,000; and the accounts payable is understated by P18,000. The mortgage payable will be assumed by the partnership. Steve's utilities payable is understated by P25,000. He will also invest additional cash of P500,000. 0000 HOW MUCH IS THE TOTAL CAPITAL OF THE NEW PARTNERSHIP? P 5,631,050 P 5,645,050 P 5,145,050 P 6,065,050
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