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For item nos. 1 and 3 OD and PP are partners sharing prots in this proportion 60:40. A balance sheet prepared for the oartners on

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For item nos. 1 and 3 OD and PP are partners sharing prots in this proportion 60:40. A balance sheet prepared for the oartners on A- ril 1, 20x4 shows the followinu Cash ................... P4B,000 Accounts P . payable ......... 89,000 Accounts Receivable ....... 92,000 00, 133,000 capital .............. Inventories .............. 105,000 PP, 108,000 capital ............... lEcluiprnent .......... 10,000 Less: Accumulated Depreciation ....... 45,000 25 000 Total P330 00 Total Liabilities & Capital . . . P Assets ................ 0 . 330,000 On this date, the partners agree to admit RR as a partner. The terms of the agreement are summarized below. Assets and liabilities are to be restated as follows: An allowance for possible uncollectible of P1500 is to be established. Inventories are to be restated at their present replacement value of P155,000. Accrued expenses of P5,000 are to be Recognized. 00, PP and HP. will divide prots in the ratio of 5:2:3. Capital balances of the partners after the formation of the new partnership are to be in the aforementioned ratio, with 00 and PP making cash settlement between them outside of the partnership to adjust their capitals, and RR investing cash in the partnership for his interest. 1. The cash to be invested by RF. is

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