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  • MM and JJ

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    dmiahal
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    MM and JJ formed a partnership on March 15, 2023, with initial capital balances of $2,625,000 for MM and $2,056,250 for JJ. Their statement of financial position showed total assets of $3,084,375 for MM and $3,215,625 for JJ. Several adjustments were agreed upon, including depreciation adjustments to equipment and additional draws to capital. To equalize capital balances to the profit/loss sharing ratio of 70% for MM and 30% for JJ, final capital balances would be $2,837,500 for MM and $1,203,125 for JJ, with total partnership assets of $6,300,000.

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    MM-and-JJ

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    MM and JJ formed a partnership on March 15, 2023, with initial capital balances of $2,625,000 for MM and $2,056,250 for JJ. Their statement of financial position showed total assets of $3,084,375 for MM and $3,215,625 for JJ. Several adjustments were agreed upon, including depreciation adjustments to equipment and additional draws to capital. To equalize capital balances to the profit/loss sharing ratio of 70% for MM and 30% for JJ, final capital balances would be $2,837,500 for MM and $1,203,125 for JJ, with total partnership assets of $6,300,000.

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    © All Rights Reserved
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    6 views1 page

    MM and JJ

    Uploaded by

    dmiahal
    MM and JJ formed a partnership on March 15, 2023, with initial capital balances of $2,625,000 for MM and $2,056,250 for JJ. Their statement of financial position showed total assets of $3,084,375 for MM and $3,215,625 for JJ. Several adjustments were agreed upon, including depreciation adjustments to equipment and additional draws to capital. To equalize capital balances to the profit/loss sharing ratio of 70% for MM and 30% for JJ, final capital balances would be $2,837,500 for MM and $1,203,125 for JJ, with total partnership assets of $6,300,000.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
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    MM and JJ decided to form a partnership on March 15, 2023.

    Their statement of FP on this date were:


    MM JJ
    Assets 65,625 164,062.50
    AR 1,487,500 896,875
    Merch. Invty. 875,000 885,937.50
    Equipment 656,250 1,268,750
    Total 3,084,375 3,215,625

    Liabilities and Capital


    AP 459,375 1,159,375
    MM Capital 2,625,000
    JJ Capital 2,056,250
    Total 3,084,375 3,215,625

    They agreed the ff. adjustment shall be made:


    *equipment of MM is under depreciated by 87,500 and that JJ is over depreciated by 131,250
    *ADA is to be set up amounting to 297,500 to MM and 196,875 for JJ
    *inventories of 21,875 and 15,312 are worthless in the books of MM and JJ respectively

    The partnership agreed to share P/L ratio of 70% to MM and 30% to JJ.

    Questions:
    Upon formation of the partnership, how much is the capital of MM and JJ respectively?

    Assuming that the capital balances are to be equaled to their P and L ratio, how much is the capital of
    MM and JJ respectively?

    Total assets of the partnership

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