Peter has been in the trading business for three years as a sole proprietor. He needed additional capital to fund business expansion but he was not successful to secure a bank loan. 

Peter decided to invite his friend, Andrew, who agreed to invest ₱745,000 cash for roughly one-third interest in the new partnership, Apostles Trading. Apostles Trading would assume the liabilities of Peter’s business. 

Profit or loss is to be shared 60:40 between Peter and Andrew, respectively. 

Andrew and Peter agreed to revalue the assets of Peter’s business itemized as follows: 

Accounts Receivable ₱144,000; 

Merchandise Inventory ₱128,000; 

Office Equipment ₱127,000; 

Land ₱1,255,000. 

Account balances in the books of Peter were as follows: 

Cash ₱221,000; 

Accounts Receivable ₱169,000; 

Allowance for Doubtful Accounts ₱9,000; 

Merchandise Inventory ₱114,000; 

Office Equipment ₱131,000; 

Accumulated Depreciation – Office Equipment ₱17,000, 

Land ₱1,000,000; 

Accounts Payable ₱247,000; 

Peter, Capital (not yet determined)

Given the investments of Peter and Andrew, how much is the total capital of Apostles Partnership?

Answer rating: 100% (QA)

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