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How much is the capital of the partners in the partnership

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Reference no: EM132859627

Question - A and B form a partnership. A contributes cash, P50,000, receivables with a net realizable value of P92,000, equipment with a book value of P70,000, allowance for bad debts, P8,000 and accumulated depreciation, 30,000. B on the other hand contributes cash, P80,000 and inventory, P35,000. The partners agree that the allowance for doubtful accounts should be increased to 10% and the inventory should be carried in the partnership books at 30,000. The equipment is subject to a loan equal to 20% of its cost which the partnership will assume and its current fair value is P35,000. The partners are to share in the ratio of 60:40 and agree that their capital balances should reflect this ratio.

1. A should:

a. Invest additional 6,880

b. Pay B P17,200

c. Invest additional P10,000.

d. Pay B P4,000.

2. How much is the capital of the partners in the partnership?

3. How much cash should A invest/(withdraw) from the partnership?

Reference no: EM132859627

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