Reference no: EM133069451
Question - 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
|
117
|
126
|
|
Accounts Receivables
|
100
|
200
|
|
Inventories
|
50
|
50
|
|
Equipment
|
80
|
0
|
|
Furniture
|
0
|
30
|
|
Prepayments
|
5
|
15
|
|
TOTAL
|
352
|
421
|
|
Accounts Payable
|
75
|
95
|
|
Capital
|
277
|
326
|
|
TOTAL
|
352
|
421
|
Partners' agreements:
Receivables are 98% collectible
Ariel's inventories fair values is at P65 while P20 of Beauty's Inventories were damaged and are only 30% recoverable.
The equipment is underdepreciated by P7 and the furniture's value will decrease by P4.
P2 of Ariel's prepayments were already exhausted while Beauty has unrecorded liability of P5.
Cindy will contribute sufficient cash to give her 20% interest
1. How much capital will be credited to Ariel?
2. How much capital will be credited to Beauty?
3. How much capital will be credited to Cindy?
4. How much is the total assets of the newly-formed partnership?