1. A and B agreed to form a partnership.

The contributions of the partners are as follows:

A B
Cash 600,000
Inventory 20,000
Land 400,000
Equipment 50,000

Additional information:
Half of the inventory is unpaid. The partnership agreed to assume the related accounts payable.
The land has a fair value of P700,000 and is subject to a mortgage of P100,000. However, B agreed to settle the mortgage pers

How much are the adjusted capital contributions of A and B, respectively?

B. 660,000; 700,000

2. A and B formed a partnership. The following are their contribution:

A B
Cash 400,000
Accounts Receivable 100,000
Equipment 700,000
Total 500,000 700,000

A, Capital 500,000
B, Capital 700,000
Total 500,000 700,000

Additional information:
The accounts receivable includes a P30,000 accounts that is deemed uncollectible.
The equipment is over-depreciated by P50,000. The equipment was obtained by B through financing.
The related loan payable has an unpaid balance of P250,000 which the partnership assumes on repaying.

Which partner has the higher capital credit and how much?
B. B, 500,000
 Solution:
A B
Cash 600,000
Inventory 20,000
Land 700,000
Equipment 50,000
Accounts Payable - 10,000
Adjusted capital balances 660,000 700,000

ed to settle the mortgage personally. Accounts payable (20,000 / 2 = 10,000)

Solution:
A B
Cash 400,000
Accounts Receivable 70,000
Equipment 750,000
Loan Payable - 250,000
Total 470,000 500,000

Accounts receivable (100,000 - 30,000 = 70,000)

Equipment (700,000 + 50,000 = 750,000)