Abner and Bimbo have just formed a partnership, Abner contributed cash of $2,346,000 and office equipment that cost $1,170,000. The equipment had been used in the sole proprietorship and had been 80% depreciated. The current fair value of the equipment is $756,000. An unpaid mortgage loan on the equipment of $252,000 will be assumed by the partnership. Abner is to have a 40% interest in the partnership net assets. Bimbo is to contribute only merchandise with a fair value of $1,890,000. Required: Use Bonus and Goodwill Method in computing the capital balances of Abner and Bimbo.
Abner and Bimbo have just formed a partnership, Abner contributed cash of $2,346,000 and office equipment that cost $1,170,000. The equipment had been used in the sole proprietorship and had been 80% depreciated. The current fair value of the equipment is $756,000. An unpaid mortgage loan on the equipment of $252,000 will be assumed by the partnership. Abner is to have a 40% interest in the partnership net assets. Bimbo is to contribute only merchandise with a fair value of $1,890,000. Required: Use Bonus and Goodwill Method in computing the capital balances of Abner and Bimbo.
Chapter14: Choice Of Business Entity—operations And Distributions
Section: Chapter Questions
Problem 25P
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Abner and Bimbo have just formed a partnership , Abner contributed cash of $2,346,000 and office equipment that cost $1,170,000. The equipment had been used in the sole proprietorship and had been 80% depreciated. The current fair value of the equipment is $756,000. An unpaid mortgage loan on the equipment of $252,000 will be assumed by the partnership. Abner is to have a 40% interest in the partnership net assets. Bimbo is to contribute only merchandise with a fair value of $1,890,000.
Required: Use Bonus and Goodwill Method in computing the capital balances of Abner and Bimbo.
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ISBN:
9780357109731
Author:
Hoffman
Publisher:
CENGAGE LEARNING - CONSIGNMENT