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How much capital will be credited to beauty

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Question - Ariel, Beauty and Cindy decided to form Disprin Partnership with 2:2:1 profit sharing. Both Ariel and Beauty have existing business. The balance sheet of the two are shown below together with their agreement prior to formation.

 

Ariel

Beauty

Cash

113

126

Accounts Receivables

200

100

Inventories

50

50

Equipment

80

0

Furniture

0

30

Prepayments

5

15

TOTAL

448

321

Accounts Payable

75

95

Capital

373

226

TOTAL

448

321

Partners' agreements: Receivables are 97% collectible.

Ariel's inventories fair values is at P49 while P20 of Beauty's Inventories were damaged and are only 30% recoverable.

The equipment is overdepreciated by P5 and the furniture's value will decrease by P4.

P3 of Ariel's prepayments were already exhausted while Beauty has unrecorded liability of P3.

Cindy will contribute sufficient cash to give her 20% interest.

Required -

1. How much capital will be credited to Ariel?

2. How much capital will be credited to Beauty?

3. How much capital will be credited to Cindy?

4. How much is the total assets of the newly-formed partnership?

Reference no: EM133052227

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