Abada and Acosta form a partnership. Abada contributed cash of P3,000,000 and an equipment costing P6,000,000. Acosta contributed land costing P6,000,000. The current market value of the assets are as follows: equipment - P4,500,000; land P7,500,000. The partnership will assume a P1,500,000 liability on the land contributed by Acosta. The capital accounts of the partners will be credited as follows: A. P9,000,000 to Abada; P4,500,000 to Acosta B. P3,000,000 to Abada; P7,500,000 to Acosta C. P7,500,000 to Abada; P6,000,000 to Acosta D. P3,000,000 to Abada; P6,000,000 to Acosta 51. On May 1, 2021, Cobb and Mott formed a partnership and agreed to share profits and losses in the ratio for 3:7, respectively. Cobb contributed a parcel of land that cost him P10,000. Mott contributed P40,000 cash. The land was sold for P18,000 on May 1, 2021, immediately after formation of the partnership. What amount should be recorded in Cobb's capital account on formation of the partnership?

Answer rating: 100% (QA)

SOLUTION To determine the correct capital account balances for Abada and Acosta we need to calculate the total fair value of the assets contributed by ... View the full answer