On July 25, 2018 Sarah and Matteo decided to form a partnership. Below is the Statement...

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On July 25, 2018 Sarah and Matteo decided to form a partnership. Below is the Statement of Financial Position of Sarah on June 30, 2018: Assets Cash Accounts Receivable Merchandise Inventory Equipment Total Liability and Equity Accounts Payable Notes Payable Sarah, Capital Total They agreed on the following at the date of formation: ➤ The Accounts Receivable is 88% collectible. > The current fair value of the Merchandise Inventory is 4,800,000. > Equipment is overvalued by 600,000. 800,000 2,400,000 4,000,000 7,200,000 14,400,000 3. What is the total amount of cash at the date of formation? 4. What is total amount if assets at the date of formation? 5. What is the total amount of liabilities at the date of formation? 3,000,000 5,000,000 6,400,000 14,400,000 > Prepaid expenses of 275,000 and accrued expenses of 125,000 are to be recognized. > Matteo will invest sufficient cash for a 25% interest in the partnership. 1. How much is the adjusted capital of Sarah on July 25, 2018? 2. How much cash will Matteo invest? On July 25, 2018 Sarah and Matteo decided to form a partnership. Below is the Statement of Financial Position of Sarah on June 30, 2018: Assets Cash Accounts Receivable Merchandise Inventory Equipment Total Liability and Equity Accounts Payable Notes Payable Sarah, Capital Total They agreed on the following at the date of formation: ➤ The Accounts Receivable is 88% collectible. > The current fair value of the Merchandise Inventory is 4,800,000. > Equipment is overvalued by 600,000. 800,000 2,400,000 4,000,000 7,200,000 14,400,000 3. What is the total amount of cash at the date of formation? 4. What is total amount if assets at the date of formation? 5. What is the total amount of liabilities at the date of formation? 3,000,000 5,000,000 6,400,000 14,400,000 > Prepaid expenses of 275,000 and accrued expenses of 125,000 are to be recognized. > Matteo will invest sufficient cash for a 25% interest in the partnership. 1. How much is the adjusted capital of Sarah on July 25, 2018? 2. How much cash will Matteo invest?

Answer rating: 100% (QA)

Adjusted capital of Sarah on July 25 2018 Sarahs capital 6400000 Adjustments Prepaid expenses recogn... View the full answer