X invited Y to a partnership interest in his business. Accounts in theledger of X on January 1, 2020, before the admission of Y, show the following: Cash-P208,000; Accounts receivable-P460,000: Inventory P1,440 ,000; Accounts payable-P496,000. It is agreed that for the purpose of establishing the interest of X, the following adjustments shall be made: a) an allowance for bad debts of 8% based on the outstanding accounts receivable is to be established. b) the inventory is to be valued at P1,000,000 c) Prepaid expenses of P72,000 and accrued expenses of P32.000 are to recognized. Y is to invest sufficient cash for a one-third interest in the partnership. How much is the adjusted capital of X?
X invited Y to a partnership interest in his business. Accounts in theledger of X on January 1, 2020, before the admission of Y, show the following: Cash-P208,000; Accounts receivable-P460,000: Inventory P1,440 ,000; Accounts payable-P496,000. It is agreed that for the purpose of establishing the interest of X, the following adjustments shall be made: a) an allowance for bad debts of 8% based on the outstanding accounts receivable is to be established. b) the inventory is to be valued at P1,000,000 c) Prepaid expenses of P72,000 and accrued expenses of P32.000 are to recognized. Y is to invest sufficient cash for a one-third interest in the partnership. How much is the adjusted capital of X?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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X invited Y to a partnership interest in his business. Accounts in theledger of X on January 1, 2020, before the admission of Y, show the following: Cash-P208,000; Accounts receivable-P460,000: Inventory P1,440 ,000; Accounts payable-P496,000. It is agreed that for the purpose of establishing the interest of X, the following adjustments shall be made: a) an allowance for bad debts of 8% based on the outstanding accounts receivable is to be established. b) the inventory is to be valued at P1,000,000 c) Prepaid expenses of P72,000 and accrued expenses of P32.000 are to recognized. Y is to invest sufficient cash for a one-third interest in the partnership. How much is the adjusted capital of X?
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