Please answer the following and provide solution/explanation. On June 30, Max and Chub formed a partnership called "Magnus Opus Partnership". The partnersagreed to invest equal amounts of capital. Max invested his proprietorship's assets and liabilities asfollows:Max's BookBook ValueFair Market ValueAccounts ReceivableP 72,000P 72,000Allowance for Uncollectible Accounts10,500Merchandise Inventory223,400241,00017,000Prepaid ExpensesOffice Equipment17,000459,000276,000Accumulated DepreciationAccounts Payable153,000191,000191,000On June 30, Chub invested cash in an amount equal to the current market value of Max's partnership capital. Max,the managing partner, would earn two- thirds of partnership profits. Chub agreed to accept one-third of the profits.During the remainder of the year, the partnership earned P450,000. The temporary withdrawals of Max and Chubwere P352,000 and P230,000, respectively.Questions1. How much is the adjusted asset of Max?2. How much is the total asset of the partnership on June 30?3. How much cash investment did Chub made?4. How much is the total cash of the partnership on June 30?5. How much is the total capital of the partnership on June 30?6. How much is the share of Max in the net income of the partnership?7. How much is the share of Chub in the net income of the partnership?8. How much is the new capital of Max after the closing of nominal accounts?9. How much is the new capital of Chub after the closing of nominal accounts?10. How much is the adjusted capital of the partnership after the closing of nominal accounts?

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Answered: On June 30, Max and Chub formed a…

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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