Reference no: EM133123554
Question - On December 31, 2020, the unadjusted Statement of Financial Position of UFC Partnership shows the following data with profit or loss sharing agreement of 2:3:5.
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Total Assets P100,000,000
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Total Liabilities
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P40,000,000
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U, Capital
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10,000,000
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F, Capital
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20,000,000
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C, Capital
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30,000,000
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On December 31, 2020, U decided to retire from the partnership. However, before the distribution of cash to U, the following data errors were discovered during the pre-retirement audit:
During 2020, the property, plant and equipment has not be subject to revaluation surplus by P15,000,000.
The 2020 net income is overstated by P5,000,000.
After the adjustment, U received retirement pay of P15,000,000 for his capital interest. What is the capital balance of F after the retirement of U?
1. 23,000,000
2. 18,875,000
3. 21,000,000
4. 21,875,000