7. MM, NN and OO are partners with capital balances on December 31, 2015 of P300,000, P300,000 and P200,000 respectively. Profits are shared equally. OO wishes to withdraw and it is agreed that OO is to take certain equipment with second-hand value of 50,000 and a note for the balance of OO's interest. The equipment are carried on the books at 65,000. Brand new equipment may cost P80,000. Compute for: (1) OO's acquisition of the second-hand equipment will result to reduction in capital; (2) the value of the note that will OO get from the partnership's liquidation.

8. Jones and Smith formed a partnership with each partner contributing the following items:

__Jones__ _Smith__

Cash.................................................................... P 80,000 P 40,000

Building-cost to jones..................................... P300,000

-fair value............................................. P400,000

Inventory-cost to Smith P200,000

-fair value............................................ P280,000

Mortgage payable............................................ P120,000

Accounts payable............................................. P 60,000

Assume that for tax purposes Jones and Smith agree to share equally in the liabilities assumed by the Jones and Smith partnership. What is the balance in each partner's capital account for financial accounting purposes?

9. The business assets of LL and MM appear below:

LL MM

Cash.......................................................... P11,000 P22,354

Accounts receivable............................... 234,536 567,890

Inventories.............................................. 120,035 260,102

Land........................................................... 603,000 -

Building...................................................... - 428,267

Furniture and fixture............................... 50,345 34,789

Other assets.............................................. 2,000____ __3,600___

Total ............................................ P1,020,916 P1,317,002

Accounts payable..................................... P178,940 P243,650

Notes payable........................................... 200,000 345,000

LL, capital.................................................... 641,976 -

MM, capital................................................ - __ _728,352_

Total ............................................. P1,020,916 P1,317,002

LL and MM agreed to form a partnership by contributing their respective assets and equites subject to the following adjustments:

a. Accounts receivable of P20,000 in LL's books and P35,000 in MM's are uncollectible.

b. Inventories of P5,500 and P6,700 are worthless in LL's and MM's respective books.

c. Other assets of P2,000 and P3,600 in LL's and MM's respective books are to be written off.

The capital account of the partners after the adjustments will be?

10. The same information in Number 9, how much total assets does the partnership have after formation?