II. Two Sole Proprietorships Converted to a Partnership On January 1, 20YY, Michael and Rafael agreed to combine their existing businesses to form a partnership. The partnership will take over the assets and will assume the liabilities of both companies. Shown below are their ledger accounts. The partners agreed on the following adjustments prior to Partnership formation: 1. The Accounts Receivable accounts of both firms are only 90% collectible. 2. Both office supplies inventory are overstated by 10%. 3. The equipment of Michael's business is under depreciated by P2,000, while that of Rafael's is over depreciated by P1,500. 4. The depreciated value of the furniture and fixtures of Michael's business is P 35,000 , while that of Rafael's is P25,000. The following are the ledger balances of Michael and Rafael after effecting the above adjustments: Required: 1. Compute for the adjusted capital balance of Michael upon the formation of the partnership. 2. Compute for the adjusted capital balance of Rafael upon the formation of the partnership