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A business owned by Kagura was short of cash and Kagura decided to form a partnership with Gusion who was able to contribute cash twice the interest of Kagura in the new partnership. The assets contributed by Kagura appears as follows in the statement of financial position of his business: cash, P9,000; accounts receivable, P189,000 with allowance for uncollectible accounts of P6,000; merchandise inventory, P420,000; and store equipment, P150,000 with accumulated depreciation of P15,000.
Kagura and Gusion agreed that the allowance for uncollectible accounts was inadequate and should be P10,000. They also agreed that the fair value for the inventory is P460,000 and for the store equipment is P140,000.
Required:
Question 1. Journal entry for the adjustments and investments
Question 2. What is the total capital of Kagura and Gusion?
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