Z admits A as a partner in business. Accounts in the ledger for Z on November 20, 2018, just before the admission of A, show the following balances: Cash                                                               P 6,800 Accounts Receivable                                        14,200 Merchandise Inventory                                    20,000 Prepaid expense                                                1,000 Accounts Payable                                              9,000 Z, Capital                                                         33,000 It is agreed that the purposes of establishing Z's interest the following adjustments shall be made: a) An allowance for doubtful accounts of 3% of accounts receivable is to be established b) The merchandise inventory is to be valued at P23,000. c) Prepaid salary expenses of P600 and accrued rent expense of P800 are to be recognized. A is to invest sufficient cash to obtain a 1/3 interest in the partnership. (1) Z's adjusted capital before the admission of A; and (2) the amount cash investment by A:

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Z admits A as a partner in business. Accounts in the ledger for Z on November 20, 2018, just before the admission of A, show the following balances:

Cash                                                               P 6,800
Accounts Receivable                                        14,200
Merchandise Inventory                                    20,000
Prepaid expense                                                1,000
Accounts Payable                                              9,000
Z, Capital                                                         33,000


It is agreed that the purposes of establishing Z's interest the following adjustments shall be made:
a) An allowance for doubtful accounts of 3% of accounts receivable is to be established
b) The merchandise inventory is to be valued at P23,000.
c) Prepaid salary expenses of P600 and accrued rent expense of P800 are to be recognized.


A is to invest sufficient cash to obtain a 1/3 interest in the partnership.
(1) Z's adjusted capital before the admission of A; and (2) the amount cash investment by A:

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