Partnership Formation_2

On October 1, 2015 MONA, NONA and OLGA decide to combine their business and form a partnership.  The financial conditions of the partners on the date before adjustments follow:

                                                  MONA                       NONA             OLGA
 Cash                                        P   10,000                    P 14,500          P 23,750 
Inventories                                   30,000                       20,000             15,000 
Office Equipment (net)                71,500                       72,750             75,000 
Accounts Payable                   P    25,750                   P 23,000          P 30,000

The partners agreed to receive an equal capital interest in the partnership.  They also agreed the following items:

• The partners have used the LIFO; however, they decided to use FIFO because it reflects the current market value which is 25% more than the value of LIFO.

•  The partnership has to assume liabilities on the office equipment of P 20,000, P 20,000 and 25,000 to MONA, NONA and OLGA respectively.

• All accounts payable are assumed except for a P 5,000 accounts payable which will be paid by the personal asset of Mona

Required:  Compute the capital balance of each partner assuming the bonus method is used. 


Please email your answer at :      timoleon.lianza@gmail.com