The balance sheet of the proprietorship of Jacob as of June 30, 2016 showed the following...

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The balance sheet of the proprietorship of Jacob as of June 30, 2016 showed the following assets and liabilities: Cash Accounts Receivable Inventory Equipment Accounts Payable P 40.000 53,600 88,000 a. Jacob's goodwill credit would be? b. Emily cash investment would be? 65,600 63,520 The cash balance included a 200- share certificate of BW Resources common at acquisition cost of P 1,600; the current market quotation is 70 per share. Of the accounts receivable, an estimated 5% is considered to be doubtful of collection. Certain inventory items, booked at a cost of P 22,960, are currently worth P 16.000. Depreciation has not been recorded; the equipment, acquired two years ago, has a remaining useful life of about eight more years. Prepaid expense of P 12,800 and accrued expense of P 6,120 have not been properly recognized. Emily and Bert will join Jacob in a partnership. Jacob will invest the net assets of his business, after effecting the appropriate adjustments, and he will be allowed credit for goodwill equal to 10% of his initial capital credit. Emily and Bert will each contribute cash to secure the respective interests of 1/3 and 1/6, respectively. The balance sheet of the proprietorship of Jacob as of June 30, 2016 showed the following assets and liabilities: Cash Accounts Receivable Inventory Equipment Accounts Payable P 40.000 53,600 88,000 a. Jacob's goodwill credit would be? b. Emily cash investment would be? 65,600 63,520 The cash balance included a 200- share certificate of BW Resources common at acquisition cost of P 1,600; the current market quotation is 70 per share. Of the accounts receivable, an estimated 5% is considered to be doubtful of collection. Certain inventory items, booked at a cost of P 22,960, are currently worth P 16.000. Depreciation has not been recorded; the equipment, acquired two years ago, has a remaining useful life of about eight more years. Prepaid expense of P 12,800 and accrued expense of P 6,120 have not been properly recognized. Emily and Bert will join Jacob in a partnership. Jacob will invest the net assets of his business, after effecting the appropriate adjustments, and he will be allowed credit for goodwill equal to 10% of his initial capital credit. Emily and Bert will each contribute cash to secure the respective interests of 1/3 and 1/6, respectively.

Answer rating: 100% (QA)

To determine Jacobs goodwill credit and Emilys cash investment we need to adjust the assets and liabilities based on the given information Lets calcul... View the full answer