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On June 30, Max and Chub formed a partnership called "Magnus Opus Partnership". The partners agreed to invest equal amounts of capital. Max invested his proprietorship's assets and liabilities as follows: Max's Book Book Value Fair Market Value Accounts Receivable P 72,000 P 72,000 Allowance for Uncollectible Accounts 10,500 Merchandise Inventory Prepaid Expenses Office Equipment Accumulated Depreciation Accounts Payable 223,400 241,000 17,000 17,000 459,000 276,000 153,000 191,000 191,000 On June 30, Chub invested cash in an amount equal to the current market value of Max's partnership capital. M the managing partner, would earn two- thirds of partnership profits. Chub agreed to accept one-third of the profits

On June 30, Max and Chub formed a partnership called "Magnus Opus Partnership". The partners agreed to invest equal amounts of capital. Max invested his proprietorship's assets and liabilities as follows: Max's Book Book Value Fair Market Value Accounts Receivable P 72,000 P 72,000 Allowance for Uncollectible Accounts 10,500 Merchandise Inventory Prepaid Expenses Office Equipment Accumulated Depreciation Accounts Payable 223,400 241,000 17,000 17,000 459,000 276,000 153,000 191,000 191,000 On June 30, Chub invested cash in an amount equal to the current market value of Max's partnership capital. M the managing partner, would earn two- thirds of partnership profits. Chub agreed to accept one-third of the profits

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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On June 30, Max and Chub formed a partnership called "Magnus Opus Partnership". The partners agreed to invest equal amounts of capital. Max invested his proprietorship's assets and liabilities as follows: Max's Book Book Value Fair Market Value Accounts Receivable P 72,000 P 72,000 Allowance for Uncollectible Accounts 10,500 Merchandise Inventory 223,400 241,000 17,000 Prepaid Expenses Office Equipment 17,000 459,000 276,000 Accumulated Depreciation Accounts Payable 153,000 191,000 191,000 On June 30, Chub invested cash in an amount equal to the current market value of Max's partnership capital. Max, the managing partner, would earn two- thirds of partnership profits. Chub agreed to accept one-third of the profits. During the remainder of the year, the partnership earned P450,000. The temporary withdrawals of Max and Chub were P352,000 and P230,000, respectively. Questions 1. How much is the adjusted asset of Max? 2. How much is the total asset of the partnership on June 30? 3. How much cash investment did Chub made? 4. How much is the total cash of the partnership on June 30? 5. How much is the total capital of the partnership on June 30? 6. How much is the share of Max in the net income of the partnership? 7. How much is the share of Chub in the net income of the partnership? 8. How much is the new capital of Max after the closing of nominal accounts? 9. How much is the new capital of Chub after the closing of nominal accounts? 10. How much is the adjusted capital of the partnership after the closing of nominal accounts?
Transcribed Image Text:On June 30, Max and Chub formed a partnership called "Magnus Opus Partnership". The partners agreed to invest equal amounts of capital. Max invested his proprietorship's assets and liabilities as follows: Max's Book Book Value Fair Market Value Accounts Receivable P 72,000 P 72,000 Allowance for Uncollectible Accounts 10,500 Merchandise Inventory 223,400 241,000 17,000 Prepaid Expenses Office Equipment 17,000 459,000 276,000 Accumulated Depreciation Accounts Payable 153,000 191,000 191,000 On June 30, Chub invested cash in an amount equal to the current market value of Max's partnership capital. Max, the managing partner, would earn two- thirds of partnership profits. Chub agreed to accept one-third of the profits. During the remainder of the year, the partnership earned P450,000. The temporary withdrawals of Max and Chub were P352,000 and P230,000, respectively. Questions 1. How much is the adjusted asset of Max? 2. How much is the total asset of the partnership on June 30? 3. How much cash investment did Chub made? 4. How much is the total cash of the partnership on June 30? 5. How much is the total capital of the partnership on June 30? 6. How much is the share of Max in the net income of the partnership? 7. How much is the share of Chub in the net income of the partnership? 8. How much is the new capital of Max after the closing of nominal accounts? 9. How much is the new capital of Chub after the closing of nominal accounts? 10. How much is the adjusted capital of the partnership after the closing of nominal accounts?
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