Reference no: EM132747936

Problem - The balance sheet as of July 31, 2016, for the business owned by Sunshine, shows the following assets and liabilities:

Cash	P50,000	Furniture and Fixtures	P164,000
Accounts Receivable	134,000	Accounts Payable	28,800
Merchandise Inventory	220,000

It is estimated that 5% of the receivables will prove uncollectible. The cash balance includes a 1,000 shares marketable equity securities recorded at its cost, P4,000. The stock last sold on the market at P17.50 per share. Merchandise inventory includes obsolete items costing P18,000 that will probably realized only P4,000. Depreciation has never recorded; however, the furniture and fixtures are two years old, have an estimated useful life of 10 years, and would cost P240,000 if purchased new. Prepaid items amount to P5,000. Paulo is to be admitted as a partner upon investing P200,000 cash and P100,000 merchandise. How much capital is to be credited to Sunshine upon formation of partnership?

a. P539,200

b. 613,000

c. 565,000

d. 606,200