Compute for the amount of cash investment by David

Reference no: EM132692103

Problem - Carlo admits David as a partner in business. Accounts in the ledger for Carlo on November 30, 2019, just before the admission of David, show the following balances:

Cash P 6,800

Accounts Receivable 14,200

Merchandise inventory 20,000

Accounts payable 8,000

CC, capital 33,000

It is agreed that for purposes of establishing Carlo'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 David is to invest sufficient cash to obtain a 1/3 interest in the partnership.

Required -

1. Compute for Carlo's adjusted capital balance before the admission of David.

2. Compute for the amount of cash investment by David?

Reference no: EM132692103

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