1.C admits DD as a partner in business. Accounts in the ledger for CC on November 30, 2008, just before the admission of DD, show the following balances:

Cash6,800

Accounts receivable14,200

Merchandise inventory20,000

Accounts payable8,000

CC, Capital33,000

It is agreed that for purposes of establishing CC's interest the following adjustments shall be made:

a)An allowance for doubtful accounts of 3% of accounts receivable is to be established.

b)The merchandise inventory is to be valued at P23,000.

c)Prepaid salary expenses of 600 and accrued expense of P800 are to be recognized.

DD is to invest sufficient cash to obtain 1/3 interest in the partnership.

(1)CC's adjusted capital before the admission of DD; and (2) the amount of cash investment by DD:

a.(1) 35,347; (2) 11,971c.(1) 35,374; (2) 17,687

b.(1) 36,374; (2) 18,487d.(1) 28,174; (2) 14,087