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In 20x5, the partners of Julio & Fong Partnership shared net income and losses equally,...

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Accounting

In 20x5, the partners of Julio & Fong Partnership shared net income and losses equally, but in 20x6 the income-sharing ratio was changed to 60% for Julio and 40% for Fong. On December 31, 20x5, inventories were understated by P12,000. On December 31, 20x6, employees' salaries payable in the amount of P5,400 and short-term prepayments of P2,700 had not been recognized in the accounting records.

Answer the following:

1. Net corrections to partners' capital accounts for Julio is? indicate increase or (decrease)?

2. Net corrections to partners' capital accounts for Fong is? indicate increase or (decrease)?

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