On July 1 of the current year, Abella and Balansay formed a partnership Abella is to invest certain business assets at values which are yet to be agreed upon. He is to transfer his business liabilities and to contribute sufficient cash to bring his total capital to P495,000, which is 60% of the total capital s had been agreed upon. Details regarding the book values of Abella's business assets and liabilities and their corresponding valuation follow: Book values Agreed valuations P148,50 16,500 288,750 Accounts receivable P148,500 9,900 265,650 Allowance for doubtful accounts Merchandise inventory Store equipment AD-Store equipment 74,250 49,500 36,300 Office equipment AD-Office equipment Accounts payable 49,500 26,400 132,000 13,200 132,000 Balansay agrees to invest cash of P82,500 and merchandise valued at current market price. The value of the merchandise to be invested by Balansay and the amount of cash to be invested by Abella are? a. P330,000 and P132,000 respectively. b. P577,500 and P135,300 respectively. E. P288,750 and P137,500 respectively. d. P247,500 and P132,000 respectively.
On July 1 of the current year, Abella and Balansay formed a partnership Abella is to invest certain business assets at values which are yet to be agreed upon. He is to transfer his business liabilities and to contribute sufficient cash to bring his total capital to P495,000, which is 60% of the total capital s had been agreed upon. Details regarding the book values of Abella's business assets and liabilities and their corresponding valuation follow: Book values Agreed valuations P148,50 16,500 288,750 Accounts receivable P148,500 9,900 265,650 Allowance for doubtful accounts Merchandise inventory Store equipment AD-Store equipment 74,250 49,500 36,300 Office equipment AD-Office equipment Accounts payable 49,500 26,400 132,000 13,200 132,000 Balansay agrees to invest cash of P82,500 and merchandise valued at current market price. The value of the merchandise to be invested by Balansay and the amount of cash to be invested by Abella are? a. P330,000 and P132,000 respectively. b. P577,500 and P135,300 respectively. E. P288,750 and P137,500 respectively. d. P247,500 and P132,000 respectively.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Transcribed Image Text:. On July 1 of the current year, Abella and Balansay formed a partnership
Abella is to invest certain business assets at values which are yet to be
agreed upon. He is to transfer his business liabilities and to contribute
sufficient cash to bring his total capital to P495,000, which is 60% of the
total capital s had been agreed upon.
Details regarding the book values of Abella's business assets and liabilities
and their corresponding valuation follow:
Book values Agreed valuations
P148,500
16,500
288,750
P148,500
9,900
Accounts receivable
Allowance for doubtful accounts
Merchandise inventory
Store equipment
AD- Store equipment
265,650
74,250
49,500
36,300
Office equipment
AD-Office equipment
Accounts payable
49,500
26,400
132,000
13,200
132,000
Balansay agrees to invest cash of P82,500 and merchandise valued at
current market price. The value of the merchandise to be invested by
Balansay and the amount of cash to be invested by Abella are?
a. P330,000 and P132,000 respectively.
b. P577,500 and P135,300 respectively.
P288,750 and P137,500 respectively.
d. P247,500 and P132,000 respectively.
C.
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 3 steps
Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education