4. As of July 1, 2015, FF and GG decided to form a partnership. Their balance sheets on this date are:

__FF__ __GG__

Cash................................................ 15,000 P 37,500

Accounts receivable................................ P540,000 P225,000

Merchandise Inventory ......................... - P202,500

Machinery and equipment.................... 150,000_ P270,000

Total............................................. P705,000 P735,000

Accounts Payable.............................. P135,000 P240,000

FF, capital............................................ P570,000

GG, captal .......................................... ___-____ P495,000

Total................................................... P705,000 P735,000

The partners agreed that the machinery and equipment of FF is under depreciated by P15,000 and that of GG by P45,000. Allowance for doubtful accounts is to be set up amounting to P120,000 for FF and P45,000 for GG. The partnership agreement provides for a profit and loss ratio and capital interest of 60% to FF and 40% to GG. How much cash must FF invest to bring the partners' capital balances proportionate to their profit and loss ratio?

5. On August 1, AA and BB pooled their assets to form a partnership, with the firm to take over their business assets and assume the liabilities. Partners' capitals are to be based on net assets transferred after the following adjustments. (Profits and loss are allocated equally.)

BB's inventory is to be increased by P4,000; an allowance for doubtful accounts of P1,000 and P1,500 are to be set up in the books of AA ad BB, respectively; and accounts payable of 4,000 is to be recognized AA's books. The individual trial balance on August 1, before adjustments, follow:

__AA__ __BB__

Assets ............................................. P75,000 P113,000

Liabilities......................................... P 5,000 P 34,500

What is the capital of AA and BB after the above adjustments?

6. CC admits DD as a partner in business. Accounts in the ledger for CC on November 30,2015, just before the admission of DD, show the following balances:

Cash .............................................................................................. P 6,800

Accounts receivable.................................................................. P14,200

Merchandise inventory............................................................. P20,000

Accounts payable .......................................................................... P 8,000

CC, capital ...................................................................................... P33,000

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 P600 and accrued rent expense of P800 are to be recognized.

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

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