Ariel, Beauty and Cindy decided to form Disprin Partnership with 2:2:1 profit sharing. Both Ariel and Beauty have existing business. The balance sheet of the two are shown below together with their agreement prior to formation. Ariel Beauty Cash 113 126 Accounts Receivables 200 100 Inventories 50 50 Equipment 80 0 Furniture 0 30 Prepayments 5 15 TOTAL 448 321 Accounts Payable 75 95 Capital 373 226 TOTAL 448 321 Partners' agreements: Receivables are 97% collectible Ariel's inventories fair values is at P49 while P20 of Beauty's Inventories were damaged and are only 30% recoverable. The equipment is overdepreciated by P5 and the furniture's value will decrease by P4. P3 of Ariel’s prepayments were already exhausted while Beauty has unrecorded liability of P3. Cindy will contribute sufficient cash to give her 20% interest 1. How much capital will be credited to Ariel?
Ariel, Beauty and Cindy decided to form Disprin
The balance sheet of the two are shown below together with their agreement prior to formation.
Ariel
Beauty
Cash
113
126
200
100
Inventories
50
50
Equipment
80
0
Furniture
0
30
Prepayments
5
15
TOTAL
448
321
Accounts Payable
75
95
Capital
373
226
TOTAL
448
321
Partners' agreements:
Receivables are 97% collectible
Ariel's inventories fair values is at P49 while P20 of Beauty's Inventories were damaged and are only 30% recoverable.
The equipment is overdepreciated by P5 and the furniture's value will decrease by P4.
P3 of Ariel’s prepayments were already exhausted while Beauty has unrecorded liability of P3.
Cindy will contribute sufficient cash to give her 20% interest
1. How much capital will be credited to Ariel?
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