Reference no: EM132624136

Carmilla and Cecilion are forming a partnership by combining their businesses. Their books show the following:

                                                           Carmilla                           Cecilion

Cash                                          72,000                             30,000

Account receivable                        150,000                         108,000

Merchandise inventory                       240,000                      156,000

Furnitures and fixtures                      330,000                       102,000

Prepaid expenses                                63,000                         21,000

Accounts payable                                366,000                      144,000

Carmilla, capital                                     489,000

Cecilion, capital                                                                       273,000

It has been agreed to recognize uncollectible accounts of P7,500 and P5,400 to each party, respectively and that the furniture and fixtures of Cecilion are overdepreciated by P9,000. Each partner's share of equity is to be equal to the net assets invested.

Required:

Problem a. Prepare the journal entries for the investment and adjustments

Problem b. What is the total capital of Carmilla and Cecilion?