Reference no: EM132987358
The post-closing trial balance of Paul Warren Sanico is presented below:
cash P80,000
Account receivable 100,000
Allow, for Doubtful Account P15,000
Merchandise 175,000
Account Payable 60,000
P. Sanico, Capital 280,000
355,000 355,000
Jay Raymond Delfin offers to invest cash of P200,000 and an equipment costing P70,000 (fair market value of P80,000) under the following conditions:
a. The Account Receivable shall be the burden of Sanico for collection and shall not form part of his investment in the partnership
b. The Account Payable shall not be carried in the book of the partnership and will be treated as personal liability of Sanico
c. Sanico may withdraw or contributed cash to make his capital balance equal to three fourth (3/4) of Delfin's offered investment
Problem 1: How much is the adjusted capital balance of Sanico after the writing-off from the records the Account Receivable and Accounts Payable Accounts?
a. P225,000
b. P260,000
c. P275,000
d. none of these above
Problem 2: How much cash should Sanico withdraw to meet one of the proposed conditions?
a. P45,000
b. P50,000
c. P70,000
d. none of these above
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