Professional Documents
Culture Documents
A B
Cash P100,000
Accounts Receivable 50,000
Inventory 80,000
Land 50,000
Building 120,000
Total P230,000 P170,000
Additional Information:
Included in account receivable is an account amounting to P20,000 which is
deemed uncollectible.
The inventory has an estimated selling price of P100,000 and estimated costs to
sell of P10,000
The partnership assumed a P10,000 unpaid mortgage on the land.
Building is under-depreciated by P25,000.
There is unpaid mortgage of P15,000 on the building which B agreed to settle
using his personal funds.
The notes payable is stated at face amount. A proper valuation requires the
recognition of a P15,000 discount on note payable.
A and B share in the profits and losses on a 60:40 ratio respectively.
Requirement:
1. Compute for the adjusted balances of the partner’s capital account.
2. Assume that a partner’s capital shall be increased accordingly by contributing
cash to bring the partners capital balances proportionate to their profit and
loss ratio. Which partner should provide additional cash and how much is the
additional cash contribution?