The balance sheet of A on November 30, 2019 before accepting B as his partner to form AB Partnership is presented below: 120,000 48,000 3.000 Assets: Cash Accounts receivable Less: Allowance for uncollectible accounts Notes receivable Merchandise inventory Equipment Less: Accumulated Depreciation Total assets 45,000 60,000 27,000 72,000 6,000 66,000 318,000 Liabilities and Capital Accounts payable Notes payable A, Capital Total liabilities and capital 12,000 60,000 246,000 318,000 It is agreed that for the purpose of establishing A's interest the following adjustments shall be made: a. The accounts receivable is estimated to be 90% realizable. b. Interest at 8% of notes receivable dated March 1, 2019 is to be accrued. c. Merchandise inventory is to be valued at P21,000. d. The equipment is under-depreciated by P4,800. e. Prepaid expenses of P2,400 and accrued expenses of P7,200 are to be recognized. B is to invest cash to obtain a one-third interest in the partnership. Required: 1. Prepare the following entries in the books of A, as to: a. Adjustments b. Closing c. Investments 2. Prepare the balance sheet after formation of the partnership