1. Atasha and Beth decided to combine their businesses and form a partnership.

The
following were their assets before formation:

Atasha Beth
Assets 421,500 206,000
Liabilities 183,000 72,000

The following were the agreements made to adjust their assets and liabilities:

 Both parties will provide P10,000 for doubtful accounts.

 Atasha and Beth’s fixed assets were over-depreciated by P2,000 and under-
depreciated by P1,000 respectively.
 Accrued expenses are to be recognized in the books of Atasha and Beth in the
amount of P2,400 and P2,000 respectively.
 Obsolete inventory to be written off by Atasha amounted to P7,000
 Atasha and Beth also agreed to share profits and losses equally.

What is the total asset of the partnership after formation?

a. 595,100
b. 601,500
c. 607,100
d. 597,100