Items 18 to 20 are based on the following data. The partnership business of John Estrada and Peter Arroyo was formed on January 2, 2020. At that date, the following assets were invested as derived from their respective sole proprietor's books. Book of Estrada Book of Arroyo 160,000 Cash. .P145,000 Accounts receivable. 80,000 50,000 Allowance for doubtful accounts. (5,000) (3,000) Merchandise inventory. 200,000 190,000 Partner's agreement as follows: 1. Estrada and Arroyo's adjusted capital contributions must be equal. In the event that one's contribution will exceed the other, any one of them shall withdraw "Cash" from their respective investment. 2. Their respective Accounts receivable should have a probability of collections. 80% for Estrada and 90% for Arroyo. 3. Merchandise inventory will be caried in the partnership book "as is". 4. Prepaid expense of P20,000 should be recognized for Estrada and P5,000 Accrued expenses for Arroyo. 18. How much is the adjusted capital contribution of Estrada? A. 412,000 с. 429,000 В. 419,000 D. 440,000 19. How much is the adjusted capital contribution of Arroyo? с. 397,000 D. 400,000 A. 385,000 В. 390,000 20. After the formation, the cash balance of Estrada and Arroyo would be: Arroyo 160,000 Estrada A. 145,000 В. 145,000 С. 106,000 D. 106,000 125,000 125,000 160,000
Items 18 to 20 are based on the following data. The partnership business of John Estrada and Peter Arroyo was formed on January 2, 2020. At that date, the following assets were invested as derived from their respective sole proprietor's books. Book of Estrada Book of Arroyo 160,000 Cash. .P145,000 Accounts receivable. 80,000 50,000 Allowance for doubtful accounts. (5,000) (3,000) Merchandise inventory. 200,000 190,000 Partner's agreement as follows: 1. Estrada and Arroyo's adjusted capital contributions must be equal. In the event that one's contribution will exceed the other, any one of them shall withdraw "Cash" from their respective investment. 2. Their respective Accounts receivable should have a probability of collections. 80% for Estrada and 90% for Arroyo. 3. Merchandise inventory will be caried in the partnership book "as is". 4. Prepaid expense of P20,000 should be recognized for Estrada and P5,000 Accrued expenses for Arroyo. 18. How much is the adjusted capital contribution of Estrada? A. 412,000 с. 429,000 В. 419,000 D. 440,000 19. How much is the adjusted capital contribution of Arroyo? с. 397,000 D. 400,000 A. 385,000 В. 390,000 20. After the formation, the cash balance of Estrada and Arroyo would be: Arroyo 160,000 Estrada A. 145,000 В. 145,000 С. 106,000 D. 106,000 125,000 125,000 160,000
Financial Accounting
14th Edition
ISBN:9781305088436
Author:Carl Warren, Jim Reeve, Jonathan Duchac
Publisher:Carl Warren, Jim Reeve, Jonathan Duchac
Chapter12: Accounting For Partnerships And Limited Liability Companies
Section: Chapter Questions
Problem 3PB
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Transcribed Image Text:Items 18 to 20 are based on the following data.
The partnership business of John Estrada and Peter Arroyo was formed on January 2, 2020. At that date, the
following assets were invested as derived from their respective sole proprietor's books.
Book of Estrada Book of Arroyo
160,000
Cash.
.P145,000
Accounts receivable.
80,000
50,000
Allowance for doubtful accounts.
(5,000)
(3,000)
Merchandise inventory.
200,000
190,000
Partner's agreement as follows:
1. Estrada and Arroyo's adjusted capital contributions must be equal. In the event that one's contribution will
exceed the other, any one of them shall withdraw "Cash" from their respective investment.
2. Their respective Accounts receivable should have a probability of collections.
80% for Estrada and 90% for Arroyo.
3. Merchandise inventory will be caried in the partnership book "as is".
4. Prepaid expense of P20,000 should be recognized for Estrada and P5,000 Accrued expenses for Arroyo.
18. How much is the adjusted capital contribution of Estrada?
A. 412,000
с. 429,000
В. 419,000
D. 440,000
19. How much is the adjusted capital contribution of Arroyo?
с. 397,000
D. 400,000
A. 385,000
В. 390,000
20. After the formation, the cash balance of Estrada and Arroyo would be:
Arroyo
160,000
Estrada
A. 145,000
В. 145,000
С. 106,000
D. 106,000
125,000
125,000
160,000
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