Reference no: EM132998242
On June 30, Max and Chub formed a partnership called "King Partnership". The partners agreed to invest equal amounts of capital. Max invested his proprietorship's assets and liabilities as follows:
Max's Book
Book Value Fair Market Value
Accounts Receivable P 72,000 P 72,000
Allowance for Uncollectible Accounts. - 10,500
Merchandise Inventory 223,400 241,000
Prepaid Expenses. 17,000. 17,000
Office Equipment 459,000. 276,000
Accumulated Depreciation. 153,000 -
Accounts Payable 191,000 191,000
On June 30, Chub invested cash in an amount equal to the current market value of Max's partnership capital. Max, the managing partner, would earn two- thirds of partnership profits. Chub agreed to accept one-third of the profits. During the remainder of the year, the partnership earned P450,000. The temporary withdrawals of Max and Chub were P352,000 and P230,000, respectively.
Problem 1. What is the adjusted asset of Max?
Problem 2. What is the total asset of the partnership on June 30?
Problem 3. What is the cash investment did Chub made?
Problem 4. What is the total cash of the partnership on June 30?
Problem 5. What is the total capital of the partnership on June 30?
Problem 6. What is the share of Max in the net income of the partnership?
Problem 7. What is the share of Chub in the net income of the partnership?
Problem 8. What is the new capital of Max after the closing of nominal accounts?
Problem 9. What is the new capital of Chub after the closing of nominal accounts?
Problem 10. What is the adjusted capital of the partnership after the closing of nominal accounts?