On Jan 1, 2019, the business assets and liabilities of FRANK and ELIJAH were as follows FRANK ELIJAH Cash P28,000 P62,000 Receivables 200,000 600,000 Inventories 120,000 200,000 Land, buildings, and equipment 650,000 535,000 Other assets 2,000 3,000 Accounts payable (180,000) (250,000) Notes payable (200,000) (350,000) FRANK and ELIJAH agreed to form a partnership by contributing their net assets, subject to the following adjustments Receivables of P 20,000 in FRANK's books and P 40,000 in ELIJAH's books are uncollectible Inventories of P 6,000 and P 7,000 in the respective books of FRANK and ELIJAH are worthless Other assets in both books are to be written off REQUIRED 1 If the partner agreed to revalue assets to maintain 40 60 capital ratio for FRANK and ELIJAH respectively, how much is the adjusted capital of FRANK 2 If the partner agreed to revalue assets to maintain 40 60 capital ratio for FRANK and ELIJAH respectively, how much is the adjusted capital of ELIJAH 3 If the partner agreed to effect revaluation down of assets to maintain 40 60 capital ratio for FRANK and ELIJAH respectively, how much is the adjusted capital of FRANK 4 If the partner agreed to effect revaluation down of assets to maintain 40 60 capital ratio for FRANK and ELIJAH respectively, how much is the adjusted capital of ELIJAH

The Answer is in the image, click to view ...

Answered step by step

Verified Expert Solution

Link Copied!

Question

1 Approved Answer

Posted on Jun 28, 2024

On Jan. 1, 2019, the business assets and liabilities of FRANK and ELIJAH were as follows: FRANK ELIJAH Cash P28,000 P62,000 Receivables 200,000 600,000 Inventories

On Jan. 1, 2019, the business assets and liabilities of FRANK and ELIJAH were as follows:

FRANK ELIJAH

Cash P28,000 P62,000

Receivables 200,000 600,000

Inventories 120,000 200,000

Land, buildings,

and equipment 650,000 535,000

Other assets 2,000 3,000

Accounts

payable (180,000) (250,000)

Notes payable (200,000) (350,000)

FRANK and ELIJAH agreed to form a partnership by contributing their net assets, subject to the following adjustments:

Receivables of P 20,000 in FRANK's books and P 40,000 in ELIJAH's books are uncollectible
Inventories of P 6,000 and P 7,000 in the respective books of FRANK and ELIJAH are worthless.
Other assets in both books are to be written off.

REQUIRED:

1. If the partner agreed to revalue assets to maintain 40:60 capital ratio for FRANK and ELIJAH respectively, how much is the adjusted capital of FRANK?

2. If the partner agreed to revalue assets to maintain 40:60 capital ratio for FRANK and ELIJAH respectively, how much is the adjusted capital of ELIJAH?

3. If the partner agreed to effect revaluation down of assets to maintain 40:60 capital ratio for FRANK and ELIJAH respectively, how much is the adjusted capital of FRANK?

4. If the partner agreed to effect revaluation down of assets to maintain 40:60 capital ratio for FRANK and ELIJAH respectively, how much is the adjusted capital of ELIJAH?