Solutions and Answers

Problem 1
1.
TUYANG MAYYANG
CASH 15,000 37,500
A/R 420,000 180,000
INVENTORY 202,500
M&E 135,000 225,000
Less: A/P 135,000 240,000
Adjusted Capital Balances 435,000 405,000

1 Pt. 1 Pt.

2 Using first TUYANG’s capital, let us determine if MAYYANG capital contribution has any deficiency.
TUYANG, CAPITAL 435,000
DIVIDE BY: P/L RATIO - TUYANG 60%
TOTAL 725000
MULTIPLY BY: P/L RATIO - MAYYANG 40%
MINIMUM CAPITAL REQUIRED - MAYYANG 290000
Adjus ted Ca pi tal Bal ance of MAYYANG 405,000
Defi ciency on MAYYANG capita l contributi on 0

Now using MAYYANG’s capital, let us determine if TUYANG capital contribution has any deficiency.
MAYYANG, Ca pi ta l 405,000
Di vi de by: P/L Ra ti o - MAYYANG 40%
TOTAL 1012500
Mul ti pl y by: P/L Ra ti o - TUYANG 60%
Mi nimum Ca pi ta l Requi red - TUYANG 607500
Adjus ted Ca pita l Ba la nce of TUYANG 435,000
Defi ci ency on TUYANG ca pi ta l contributi on 172,500

TUYANG should provide additional cash contribution of P172,500 (3 PTS.) to make his contribution proportionate
to his profit or loss ratio.

Problem 2
Solution:
PEK POK
CASH 50,000 120,000
A/R 300,000 760,000
INVENTORY 216,000 340,000
LAND 1,080,000
BUILDING 900,000
EQUIPMENT 90,000 130,000
Less: A/P 436,000 450,000
MORTGAGE 180,000
Adjusted Capital Balances 1,120,000 1,800,000
2 PTS 2PTS
 3PTS 3PTS

Contribution of PEK Contribution of POK

Cash 50,000 Cash 120,000
A/R 300,000 A/R 760,000
M/I 216,000 M/I 340,000
Land 1,080,000 Building 900,000
Equipment 90,000 Equipment 130,000
A/P 436,000 A/P 450,000
M/P 180,000 POK, Capital 1,800,000
PEK, Capital 1,120,000