Andreau Torralba who has been in business for a quite long time has decided to venture partnership business with Cecil Rosada. The Statement of Financial Position of Torralba prior to the inception of the partnership revealed the following balances: Cash P85,000 Accounts Receivable 60,000 Allowance for Doubtful Accounts 4,000 Merchandise 120,000 Equipment 150,000 Acc. Depreciation-Equipment 30,000 Accounts Payable 80.000 A. Torralba, Capital ? As agreed, Rosada will contribute cash equal to one-half (1/2) of the capital balance of Torralba after taking into account the following adjustments: The allowance for doubtful accounts is over set-up by P 3,000 b. Merchandise should be valued at P 105,000 due to obsolescence. The equipment is under depreciated by P 15,000. d. Accounts Payable was overstated by P 4,000 due to recording of an expense. Required: 1. Compute the capital account balance of Torralba prior to partnership formation. 2. Prepare the necessary adjusting entries in the book of Torralba by directly effecting his capital account. 3. Prepare a journal entry to close the book of Torralba. 4. Prepare a journal entry to open the book of the partnership. This will record the contribution of Torralba and Rosalda. 5. Prepare a Statement of Financial Position after the partnership formation. a. C