As of July 1, 2020, MM and AA decided to form a partnership. Their balance sheets on this date are: MM AA Cash Accounts receivable Allowance for doubtful accounts 15,000.00 680,000.00 (140,000.00) 38,000.00 255,000.00 (30,000.00) 202,000.00 270,000.00 735,000.00 Merchandise Inventory Machinery and Equipment Total 150,000.00 705,000.00 Accounts payable MM, Capital AA, Capital Total 135,000.00 570,000.00 240,000.00 495,000.00 735,000.00 705,000.00 The partners agreed that the machinery and equipment of MM is under depreciated by P15,000 and that of AA by P45,000. Allowances for doubtful accounts is to be set up amounting to P120,000 for MM and P40,000 for AA. The partnership agreement provides for the proft and loss ratio and capital interest of 60% to MM and 40% to AA with AA's capital as base. How much cash must MM invest to bring the partner's capital balances proportionate to their profit and loss ratio?

As of July 1, 2020, MM and AA decided to form a partnership. Their balance sheets on this date are: MM AA Cash Accounts receivable Allowance for doubtful accounts 15,000.00 680,000.00 (140,000.00) 38,000.00 255,000.00 (30,000.00) 202,000.00 270,000.00 735,000.00 Merchandise Inventory Machinery and Equipment Total 150,000.00 705,000.00 Accounts payable MM, Capital AA, Capital Total 135,000.00 570,000.00 240,000.00 495,000.00 735,000.00 705,000.00 The partners agreed that the machinery and equipment of MM is under depreciated by P15,000 and that of AA by P45,000. Allowances for doubtful accounts is to be set up amounting to P120,000 for MM and P40,000 for AA. The partnership agreement provides for the proft and loss ratio and capital interest of 60% to MM and 40% to AA with AA's capital as base. How much cash must MM invest to bring the partner's capital balances proportionate to their profit and loss ratio?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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The following information relates to partner for the year ended 29 February 2020: Current account credit balance on 29 February 2020 20 000 Profit share 50 000 Salaries 180 000 Interest on capital 24 000 Drawings 220 000 Interest on drawings 2 000 What is the balance in the Current account of the partner on 01 March 2019? OA. R12 000 DR. B. R116 00O DR OC. R52 000 CR D. R12 000 CR S Type here to search
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