Reference no: EM132633573

On this date A invited B to join him as a partner in the partnership, investing sufficient amount to equal to the investment of A.

The partners agreed on the following adjustments to be made in the book of A.

1. The inventory is to be valued at P55,000
2. An allowance for bad debts of 10% of the accounts receivable will be provided
3. The building must be depreciated by 20%
4. Prepaid expense of P2,000 must be set-up
5. Accrued expenses of P35,000 are to be recognized

Problem 1: How much is the decrease in the value of inventory

a. 7,000

b. 7,500

c. 55,000

d. 62,500

Problem 2: How much is the allowance for bad debts?

a. 10,000

b. 100,000

c. 20,000

d. 90,000

Problem 3: How much is the accumulated depreciation for the building

a. 25,000

b. 225,000

c. 50,000

d. 200,000

Problem 4: What is the new balance of current asset of A.

a. 497,000

b. 207,000

c. 197,000

d. 212,500

Problem 5: What is the new total of non-current assets of A after the adjustments?

a. 300,000

b. 250,000

c. 512,000

d. 275,000

Problem 6: How much is the total assets of A?

a. 447,000

b. 497,000

c. 512,500

d. 5000,000

Problem 7: How much is the new capital of A?

a. 412,000

b. 412,500

c. 512,000

d. 512,500

Problem 8: How much should B invest in the partnership ?

a. 512,500

b. 412,500

c. 412,000

d. 512,000