Reference no: EM132701316

CC admits DD as a partner in business. Accounts in the ledger for CC on November 30,2001, just before the admission of DD, show the following balances:

Cash P 6,800
Receivable 14,200
Merchandise inventory 20,000
Accounts payable 8,000
CC, capital 33,000

It is agreed that for purposes of establishing CC's interest the following adjustments shall be made:

1. An allowance for doubtful accounts of 3% of accounts receivable is to be established.
2. The merchandise inventory is to be valued at P23,000. 
3. Prepaid salary expenses of P600 and accrued rent expense of P800 are to be recognized. DD is to invest sufficient cash to obtain a 1/3 interest in the partnership.

Question (1) CC's adjusted capital before the admission of DD

Question (2) the amount of cash investment by DD