Accounting for special transaction

CASE 1 (22 points: 4 problem solving; 1 journal entry) On May 1, 20x1, the statement of financial position of Juan and Pablo appear below: Juan Pablo Cash 22,000 44,708 Accounts receivable 469,072 1,135,780 Inventories 240,070 520,204 Land 1,206,000 Building 856,534 Furniture and fixtures 100,690 69,578 Other assets 4,000 7,200 Total assets 2,041,832 2,634,004 Accounts payable 357,880 487,300 Notes payable 400,000 690,000 Juan, Capital 1,283,952 Pablo, Capital 1,456,704 Total liabilities and equity 2,041,832 2,634,004 Juan and Pablo agreed to form a partnership contributing their respective assets and equities subject to the following adjustments: a. Accounts receivable of P40,000 in Juan's books and P70,000 in Pablo's books are uncollectible. b. Inventories of P11,000 and P13,400 are worthless in Juan's and Pablo's respective books. c. Other assets of P4,000 and P7,200 in Juan's and Pablo's respective books are to be written off. Required: 1. What are the adjusted capital balances of the partners after formation? (2 items x 5 points) 2. Pedro offered to join for a 20% interest in the firm. How much should cash should Pedro contribute? 3. Prepare journal entry to record Pedro's admission. (1 item x 2 points) 4. During the first year of operations, the partnership earned P650,000. After Peter's admission, the profit and loss sharing ratio is 40:40:20 for Juan, Pablo, and Pedro, respectively, based on capital credits. Drawings were made in these amounts: Juan, P100,000; Pablo, P130,000; Pedro - P56,000. What is the capital balance of Pedro after the first year