1. Gregorio and Andres entered into a partnership agreement in which Gregorio is to have a 60% interest in capital and profits and Andres is to have a 40% interest in capital and profits. Gregorio will contribute cash and the following non-cash assets: Land -Cost-P25,000 FMV-P40,000; Building-Cost-P200,000 FMV-P120,000; Equipment-Cost-P40,000 FMV-P30,000. There is a P60,000 mortgage on the Building that the partnership agrees to assume. Andres contributes P 100,000 cash to the partnership. How much is the capital interest of Gregorio in the new partnership?

Follow up questions:

how much is the total capital the new partnership? and based on the agreement, how much is the additional cash investment of Gregorio to have a 60% share in the new partnership?

2. Tala admits Baba to a partnership interest in his business. Accounts in the ledger of Tala on January 1, 2019, before the admission of Baba, show the following: Cash-P208,000; Accounts receivable-P460,000; Inventory-P1,440,000; Accounts payable-P496,000. It is agreed that for the purpose of establishing the interest of Tala, the following adjustments shall be made: a) an allowance for bad debts of 5% based on the outstanding accounts receivable is to be established. b) the inventory is to be valued at P1,616,000 c) Prepaid expenses of P72,000 and accrued expenses of P32,000 are to recognized. Baba is to invest sufficient cash for a one-third interest in the partnership. How much is the adjusted capital of Tala? and how much is the investment of Baba?