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Need answer here please. i am confused on the adjustments. O. On July 1, 2013, the statement of financial position for the partnership of Karl,

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Need answer here please. i am confused on the adjustments.

image text in transcribed
O. On July 1, 2013, the statement of financial position for the partnership of Karl, Lester and Miles together with their respective profit and loss ratio were as follows: Assets, at cost P1,800.000 Karl, Loan P 90,000 Karl, Capital (20%) 420,000 Lester, Capital (20%) 390,000. Miles, Capital (60%) 900,000 P1.800.000 Karl died. The partnership would settle his interest with his heirs. By mutual agreement, the assets are to be adjusted to their fair market value of P2,160,000 at July 1, 2013. It was agreed that the partnership would pay Karl's heirs P650,000 cash for his interest, including Karl's loan which is to be repaid in full. 22. After settlement with Karl's heirs, what would be the respective capital balances of Lester and Miles

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