Rose Tyler has owned and operated a proprietorship for several years. On January 1, she decides to terminate this business and become a partner in the firm of Tyler and Sigma. Tyler's investment in the partnership consists of Php12,000 in cash, and the following assets of the proprietorship: accounts receivable Php14,000 less allowance for doubtful accounts of Php2,000, and equipment Php20,000 less accumulated depreciation of Php14,000. It is agreed that the allowance for doubtful accounts should be Php3,000 for the partnership. The fair value of the equipment is Php13,500. Determine the capital balance of Rose Tyler in the partnership if the partnership also agrees to assume Tyler's sole proprietorship's liabilities of Php25,000.
Rose Tyler has owned and operated a proprietorship for several years. On January 1, she decides to terminate this business and become a partner in the firm of Tyler and Sigma. Tyler's investment in the partnership consists of Php12,000 in cash, and the following assets of the proprietorship: accounts receivable Php14,000 less allowance for doubtful accounts of Php2,000, and equipment Php20,000 less accumulated depreciation of Php14,000. It is agreed that the allowance for doubtful accounts should be Php3,000 for the partnership. The fair value of the equipment is Php13,500. Determine the capital balance of Rose Tyler in the partnership if the partnership also agrees to assume Tyler's sole proprietorship's liabilities of Php25,000.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Transcribed Image Text:Rose Tyler has owned and operated a proprietorship for several years. On January 1, she decides to terminate this
business and become a partner in the firm of Tyler and Sigma. Tyler's investment in the partnership consists of
Php12,000 in cash, and the following assets of the proprietorship: accounts receivable Php14,000 less allowance for
doubtful accounts of Php2,000, and equipment Php20,000 less accumulated depreciation of Php14,000. It is agreed
that the allowance for doubtful accounts should be Php3,000 for the partnership. The fair value of the equipment is
Php13,500. Determine the capital balance of Rose Tyler in the partnership if the partnership also agrees to assume
Tyler's sole proprietorship's liabilities of Php25,000.
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