The accounting profit before tax for the year ended December 31, 2021, for JENDEUKIE Co. amounted to P175, 900 and included: Interest income Long-service leave expense Doubtful debts expense Depreciation - plant (15 % p.a) Rent expense Entertainment expense (non-deductible) 11,000 7,000 4,200 33,000 22,800 3,900 The draft statement of financial position at December 31, 2021 contained the following assets and liabilities:
On January 1, 2021, A and B, both sole proprietors, decided to form a partnership to expand both of their businesses. According to their agreement, they will split
The following are A and B’s Statements of Financial Position (Attached in the photo):
The values reflected in the
A's
Both Inventories of A and B are now 90,000 and 70,000 respectively.
Equipment for B has an assessed value of 275,000, appraised value of 250,000 and book value of 200,000.
Additional accrued expenses are to be established in the amount of 10,000 for B only while additional accounts payable in the amount of 5,000 for A
It is also agreed that all liabilities will be assumed by the partnership, except for the notes payable of B which will be personally paid by him.
Answer the question based on the above:
How much are the capital credit and the adjusted capital balances of A and B upon formation?
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