Reference no: EM132996714
Question - Show the solution in good accounting form On March 1, 2018, X and Y formed a partnership. The partners contributed the following:
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X
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Y
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Cash
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P500,000
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P400,000
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Accounts Receivable
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300,000
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200,000
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Allowance for doubtful accounts
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50,000
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20,000
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Inventory
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150,000
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100,000
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Equipment
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500,000
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200,000
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Accumulated depreciation
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100,000
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25,000
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Accounts Payable
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50,000
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400,000
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Note Payable
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200,000
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The partners agree on the following:
a. P10,000 of the accounts receivable of X is to be written-off.
b. An allowance for doubtful accounts of 15% is to be established on the remaining receivables of X and Y.
c. The inventory of Y is to be valued at P140,000.
d. The equipment of X is under depreciated by P20,000 and the equipment ofY has a fair value of P190,000.
e. The note of X is dated December 1, 2017 and is subject to a 12% interest. Interest had not yet been accrued.
f. The partners agree on a 2:1 profit and loss ratio.
g. The partners agree to bring their capital balance proportionate to their profit and loss ratio.
Required - If the goodwill method is to be used in determining the capital of each partner, how much is the adjusted capital of Y after the formation?
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