1.) B. P2,935,406.

25

Solution:

AK BK
Unadjusted Capital 2,625,000 2,056,250
Equipment (87,500) 131,250
Allowance for Doubtful Acct. (297,500) (196,875)
Inventories (21,875) (15,312.50)
Adjusted Capital 2,218,125 1,975,312.5

AK Adjusted Capital 2,218,125

BK Adjusted Capital 1,975,312.5

Total 4,193,437.5

4,193,437.5* 70% = Php 2,935,406.25

4,193,437.5* 30%= Php 1,258,031.25

2.) A. P486,400

Solution:

AB QR
Unadjusted Capital 652,000 724,000
Inventories 20,000 (24,000)
Note Payable 140,000 -
Adjusted Capital 812,000 70,000

812,000*20%= 162,400 AB Cash + QR Cash + Additional Investment

162,400+812,000= 974,400 136,000 + 76,000 + 274,400 = 486,400

974,400-700,000=274,000

Additional Investment 274,400

3.) C. 1,344,000

Solution:
 BOOK VALUE
Accounts Receivable 400,000
Inventories 1,120,000
Machineries, net 2,240,000
Intangible, net 920,000
Total 4,680,000
Cash (3,120,000)
Accounts Receivable uncollectible (32,000)
Inventories to be written down (1,120,000-1,040,000) (80,000)
Machineries (384,000-336,000) (48,000)
CD Patent (56,000)
Total ( Fair Value of the Equipment) 1,344,000

4.) D. 5,025,000

Solution:

MG MN
Cash 2,512,500 2,512,500
Accounts Receivable 262,500 195,000
Inventories 450,000 207,500
PPE 912,500 822,500
Accounts Payable 150,000 112,500
Capital 3,987,500 3,625,000

Cash
5,025,000 / 2 = 2,512,500

Total Asset – Total Liabilities= Capital

MG
4,137,500 - 4,137,500 = 3987500
MN
3,737,500 - 112500 = 3625000

TO CORRECT :

3625000 * 10% = 362,500

3625000 + 362,500 = 3987500

5.) D. 687,500
 Solution :

Sarah Theo
Cash 375,000 875,000
Merchandise 125,000 -
Furniture & Fixtures 312,000 937,500
Transportation Equipment - 2,812,500
Trans. Equip. Mortgage loan - (1,125,000)
Capital 812,500 3,500,000

3,500,000 / 70% = 5,000,000

5,000,000 – 3,500,000 = 1,500,000
1,500,000 – 812,500 = 687,500

6.) C. 300000
Solution :

ABRAHAM SARAH
Cash 800,000
Accounts Receivable 240,000
Inventory 640,000
Land 400,000
Building 760,000
Total 1,680,000 1,160,000

Note Payable 360,000

Mortgage Payable 80,000
Abraham, Capital 1,320,000
Sarah, Capital 1,080,000
Total 1,680,000 1,160,000

Accounts Receivable 1,080,000 / 40% = 2,700,000

400000 – 160000 = 240,000 2,700,000 –1,080,000= 1,620,000

Building 1,620,000 – 1,320,000 = 300,000

960000 – 200000 = 7,600,000

Note Payable

480000 – 120000 = 360,000