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Question 16 and 17...

16. Veejay Lee is the owner of VJ's Internet Cafe. She has to expand her business so she invited a partner, Jackie Lou on August 1, 2018 and the latter accepted. In the books of Lee, just before the partnership formation, are the following accounts and their balances: Cash P 17,500 Accounts Receivable 40,000 Allowance for Bad Debts 3,500 Notes Receivable 50,000 Merchandise Inventory 180,000 Store Furniture and Equipment 300,000 Accumulated Depreciation 11,000 Accounts Payable 50,000 a. P5,000 should be the full amount of the Allowance for Bad debts. b. The note is dated March 31 and is due on September 1 at 12% interest. Market value of the merchandise is P145,000. d. Lou will invest cash for a 50% interest in an agreed total equity of P800,000 c. Lee will adjust the store furniture and equipment's value to come up with an equal sharing with Lou f. New books will be used by the partnership. Direction: a) List the assets and liabilities of Lee at the adjusted amounts. How much is her adjusted capital? b) Compare the adjusted capital against the agreed capital. How much is the revaluation for the store equipment? c) Make three sets of entries to: 1) adjust and close Lee's books, 2) record Lee's investment in the partnership books and 3) record Lou's investment 17. Using Exercise 16. Assume there is no furniture revaluation. Instead, Lou will invest enough cash to come up with an agreed equity of P800,000. It was further agreed that bonus should be recognized so that each capital will represent a 50% interest in the partnership equity Direction: 1) Entry to record investment of Lee in the partnership books. 2) Record investment of Lou including the effect of the bonus