PROBLEM $4$: MULTIPLE CHOICE $-$ COMPUTATI$$NAL

Twinkle, Sheep and Bus formed a partnership. Twinkle contributed cash of $P80,000.$ Sheep contributed equipment with historical cost of $P700,000,$ carrying amount of $P180,000,$ and fair value of $P90,000.$ Bus contributed building with historical cost of $P1,000,000,$ carrying amount of $P480,000,$ and fair value of $P690,000.$ The partnership will assume the unpaid mortgage of $P580,000$ on the building. Which partner has the largest capital account balance on partnership formation?

a$.$ Twinkle

c$.$ Bus

b$.$ Sheep

d$.$ None, all are equal

Hammer and Nail formed a partnership. Hammer contributed equipment with original cost of $P370,000$ and fair value of P$300,000$ while Nail contributed cash of $P180,000.$ Hammer and Nail agreed to have a $60$:$40$ interest in the partnership and that their initial capital credits should reflect this fact. A partner's capital account should be increased accordingly by way of additional cash investment. Which of the partners should make an additional investment and by how much?

a$.$ Hammer, $P20,000$

c$.$ Hammer, P$70,000$

b$.$ Nail, $P20,000$

d$.$ Nail, P$70,000$