Vee and Wise decided to form a partnership on April 15, 2020. Their Statements of Financial...

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Vee and Wise decided to form a partnership on April 15, 2020. Their Statements of Financial Positionon this date were: Assets Cash Accounts Receivable Merchandise Inventory Equipment Liabilities and Capital Accounts Payable Total Vee, Capital Wise, Capital Total . . P Vee 131,250 2,975,000 1,750,000 1,312,500 6,168,750 918,750 5,250,000 6,168,750 Wise P 328,125 1,793,750 1,771,875 2,537,500 6,431,250 2,318,750 They agreed on the following adjustments shall be made: Equipment of Vee is underdepreciated by P 175,000 and that Wise is overdepreciated by P 262,500 . Allowance for doubtful accounts is to be set up amounting to P595,000 for Vee and P393,750 for Wise Inventories of P43,750 and and P30,624 are worthless in the books of Vee and Wise, respectively. The partnership agreement provides for a profit and loss ratio of 60% to Vee and 40% for Wise 4,112,500 6,431,250 Requirements: 1. Upon the formation of the partnership, how much is the capital of Vee and Wise, respectively? 2. Assuming that the capital balances are to be equaled to their P&L ratio, how much is the capital of Vee and Wise, respectively? 3. Compute for the total assets of the partnership. Vee and Wise decided to form a partnership on April 15, 2020. Their Statements of Financial Positionon this date were: Assets Cash Accounts Receivable Merchandise Inventory Equipment Liabilities and Capital Accounts Payable Total Vee, Capital Wise, Capital Total . . P Vee 131,250 2,975,000 1,750,000 1,312,500 6,168,750 918,750 5,250,000 6,168,750 Wise P 328,125 1,793,750 1,771,875 2,537,500 6,431,250 2,318,750 They agreed on the following adjustments shall be made: Equipment of Vee is underdepreciated by P 175,000 and that Wise is overdepreciated by P 262,500 . Allowance for doubtful accounts is to be set up amounting to P595,000 for Vee and P393,750 for Wise Inventories of P43,750 and and P30,624 are worthless in the books of Vee and Wise, respectively. The partnership agreement provides for a profit and loss ratio of 60% to Vee and 40% for Wise 4,112,500 6,431,250 Requirements: 1. Upon the formation of the partnership, how much is the capital of Vee and Wise, respectively? 2. Assuming that the capital balances are to be equaled to their P&L ratio, how much is the capital of Vee and Wise, respectively? 3. Compute for the total assets of the partnership.

Answer rating: 100% (QA)

1 The capital of Vee is P5250000 and the capital of Wise is P4112500 upon the formation of the ... View the full answer