On October 1, 2005, Steve admits Martin for an interest in his business. On this date, Steve's capital account shows a balance of P174,000. The following were agreed upon before the formation of partnership: a. Prepaid expenses of P21,000 and accrued expenses of P4,500 are to be recognized. b. 5% of the outstanding accounts receivable of Steve amounting to P90,000 is to be recognized uncollectibles. c. Martin is to be credited of 20% interest in the partnership and is to invest cash aside from P36,000 worth of merchandise inventory. How much is the capital of Martin?
On October 1, 2005, Steve admits Martin for an interest in his business. On this date, Steve's capital account shows a balance of P174,000. The following were agreed upon before the formation of partnership: a. Prepaid expenses of P21,000 and accrued expenses of P4,500 are to be recognized. b. 5% of the outstanding accounts receivable of Steve amounting to P90,000 is to be recognized uncollectibles. c. Martin is to be credited of 20% interest in the partnership and is to invest cash aside from P36,000 worth of merchandise inventory. How much is the capital of Martin?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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On October 1, 2005, Steve admits Martin for an interest in his business. On this date, Steve's capital account shows a balance of P174,000. The following were agreed upon before the formation of partnership :
a. Prepaid expenses of P21,000 and accrued expenses of P4,500 are to be recognized. b. 5% of the outstanding accounts receivable of Steve amounting to P90,000 is to be recognized
uncollectibles.
c. Martin is to be credited of 20% interest in the partnership and is to invest cash aside from P36,000 worth of merchandise inventory. How much is the capital of Martin?
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