WHAT AMOUNT OF CASH TO BE SETTLED

After C's admission, the partners agreed to adjust their capital balances to reflect their respective interests in the partnership's net assets. Cash settlement is to be made between the partners. How much is the cash settlement? The statement of financial position of the partnership of A and B as of December 31, 20x1 is shown below: Cash 33,354 Accounts receivable 802,426 Inventory 380,137 Land 603,000 Building 428,267 Equipment 85,134 Other assets 5,600 Total assets 2.337,918 Accounts payable 422,590 Notes payable 545,000 A, capital 641,976 B, capital 728,352 Total liabilities and equity 2.337,918 A and B share in profits and losses equally. On January 1, 20x2, C informed A and B of his intention to invest in the partnership for a 20% interest. The partners agreed on the following adjustments prior to C's admission: o Accounts receivable of P55,000 should be written-off. o Inventories of P12,200 are obsolete and have no resale value. o The 'Other assets' should be written off