Reference no: EM132934215

Moira admits Joni as a partner in the business. Balance sheet accounts of Moira just before the admission of July shows: Cash, P43,000, Accounts Receivable, P150,000, Merchandise Inventory, P170,000, and Accounts Payable, P52,000.

It was agreed that for purposes of establishing Moira's interest, the following adjustments should be made:

1.) an allowance for doubtful accounts of 3% of accounts receivable is to be established;

2.) merchandise inventory is to be increased by P25,000; and

3.) prepaid expenses of P7,600 and accrued liabilities of P4,800 are to be recognized.

Problem 1: If Joni is to invest sufficient cash to obtain 2/5 interest in the partnership, what amount should she contribute to the new business? (Good Accounting Form)