The firm of Loid Forger has been operating for three years, during which time profits have been satisfactory but the additional investment is still needed both to strengthen its position in the market and to increase its profits. On April 30, 2021, Loid agrees to admit Yor as a partner in the firm. Yor offers to invest cash to the partnership to give her a capital credit of 40%. Account Cash Accounts receivable TB - Debit (Credit) Fair Market Value 14,500.00 14,500.00 57,600.00 45,000.00 Allowance for bad debts Inventory Prepayments (4,500.00) 124,000.00 110,000.00 22,500.00 Land 1,200,000.00 1,500,000.00 Building 550,000.00 350,000.00 Accumulated depreciation - building (50,000.00) Furniture and Fixture 144,800.00 45,500.00 Accumulated depreciation - F&F (82,000.00) Accounts payable (46,700.00) Motgage Payable (725,000.00) Accrued expenses Loid, Capital (1,205,200.00) The adjustments agreed upon are as follows: 1. Set up 10% of customers' accounts receivable as doubtful after writing off P3,500 worthless accounts. 2. Inventories to be valued at 85% of its fair market value. 3. Prepayments should all be expensed. 4. Land and Building should be adjusted to 90% of its fair market value. 5. Accumulated Depreciation for Furniture & Fixture is undervalued by 4,880 6. Accrued expenses should be set up amounting to 27,500 7. Loid should pay 25,000 of the mortgage payable out of his personal cash