Reference no: EM132622713

On May 1, 2020, the business assets and liabilities of LONZO and BRANDON were as follows:

	LONZO	BRANDON
Cash	P 28,000	P 62,000
Receivables	200,000	600,000
Inventories	120,000	200,000
Land, buildings, and equipment	650,000	535,000
Other assets	2,000	3,000
Accounts payable	180,000	250,000
Notes payable	200,000	350,000

LONZO and BRANDON agreed to form a partnership by contributing their net assets, subject to the following adjustments:

• Receivables of P 20,000 in LONZO's books and P 40,000 in BRANDON's books are uncollectible
• Inventories of P 6,000 and P 7,000 in the respective books of LONZO and BRANDON are worthless.
• Other assets in both books are to be written off.

Problem 1: Under the Bonus Method, if the partner agreed to have a capital ratio of 60:40 for LONZO and BRANDON respectively, and they further agreed to h

ave a total capital of P 1,500,000, how much is the adjusted capital of LONZO?