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  • Practice Exercise D7

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    Fionna Rei DeGalicia
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    The document is calculating the amount of cash on the partnership's statement of financial position on December 1, 2022. It provides the accounts receivable, inventory, PPE, and accounts payable amounts for two partners, MG and AN. It sets up two equations based on the total assets for each partner plus an unknown cash amount, and solves for the cash amount. The calculated cash amount is $2,512,500.

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    The document is calculating the amount of cash on the partnership's statement of financial position on December 1, 2022. It provides the accounts receivable, inventory, PPE, and accounts payable amounts for two partners, MG and AN. It sets up two equations based on the total assets for each partner plus an unknown cash amount, and solves for the cash amount. The calculated cash amount is $2,512,500.

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    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
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    13 views1 page

    Practice Exercise D7

    Uploaded by

    Fionna Rei DeGalicia
    The document is calculating the amount of cash on the partnership's statement of financial position on December 1, 2022. It provides the accounts receivable, inventory, PPE, and accounts payable amounts for two partners, MG and AN. It sets up two equations based on the total assets for each partner plus an unknown cash amount, and solves for the cash amount. The calculated cash amount is $2,512,500.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
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    of 1

    D.

    7. What is the amount of cash on the partnership’s statement of financial position on


    December 1, 2022

    MG (Fair Value) AN (Fair Value)

    Accounts Receivable 262,500 195,000

    Inventory 450,000 207,500

    PPE 912,500 822,500

    Accounts Payable (150,000) (112,500)

    1,475,000 1,112,500

    Total MG = 1,475,000 + x (x represents cash)


    Total AN = 1,112,500 + x (x represents cash) - should be the investment of MG

    ( 1,112,500 + x ) 110% or 1.10


    = 1,223,750 + 1.10x

    1,223,750 + 1.10x = 1,475,000 + x


    1.10x - x = 1,475,000 - 1,223,750
    1.10x - 1x = 251,250
    0.10x = 251,250
    —-------- = —--------
    0.10 = 0.10

    x = 2,512,500
    2,512,500 x 2 = 5,025,000

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