PROBLEM

Gryffindor Slytherin Cash 35,000 15,000 Merchandise 45,000 Building 100,000 Furniture and fixtures 25,000 The building is subject to a mortgage loan of P30,000 that is to be assumed by the partnership. The partnership agreement provides that Gryffindor and Slytherin share profits or losses 40:60, respectively. Required: 1. Using the net assets contribution approach, how much is the capital credit to Slytherin? 2. Assuming the partners agreed to have an equal capital credit, how much is the capital of Gryffindor? 3. Assuming the partners agreed that the profit and loss ratio is the same as capital ratio, how much is the capital of Slytherin