Reference no: EM132632236
Question - A summary financial position for the A Company appears below.
ASSETS
Cash P50,000
Accounts Receivable 100,000
Inventory 62,500
Land 50,000
Building 250,000
Total Assets 512,500
Owner's Equity
A Capital 512,500
Total Partners' Equity P512,500
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
Accrued expenses of P35,000 are to be recognized
1. How much is the decrease in the value of inventory
2. How much is the allowance for bad debts?
3. How much is the accumulated depreciation for the building
4. What is the new balance of current asset of A.
5. What is the new total of non-current assets of A after the adjustments?
6. How much is the total assets of A?
7. How much is the new capital of A?
8. How much should B invest in the partnership?