Brown and Zendaya enter into a partnership agreement in which Brown owns 60% of the capital and profits and Zendaya gets 40% of the capital and profits. Brown made the following contributions: Acquisition cost Fair value Equipment $20.000.000 $15,000,000 Building 100,000,000 60,000,000 Land 10,000,000 20,000,000 On the Building there are $30,000,000 mortgages that have been approved by the partnership. Zendaya contributed $50 million to the partnership. Brown and Zendaya agree that Zendaya's estimate should equal Zendaya's $50 million cash contribution and that goodwill should be recorded. Goodwill must be recorded at the amount a). 16,666,667 b). 10,000,000 c). 20,000,000 d). 15,000,000
Brown and Zendaya enter into a partnership agreement in which Brown owns 60% of the capital and profits and Zendaya gets 40% of the capital and profits. Brown made the following contributions: Acquisition cost Fair value Equipment $20.000.000 $15,000,000 Building 100,000,000 60,000,000 Land 10,000,000 20,000,000 On the Building there are $30,000,000 mortgages that have been approved by the partnership. Zendaya contributed $50 million to the partnership. Brown and Zendaya agree that Zendaya's estimate should equal Zendaya's $50 million cash contribution and that goodwill should be recorded. Goodwill must be recorded at the amount a). 16,666,667 b). 10,000,000 c). 20,000,000 d). 15,000,000
Chapter20: Corporations And Parterships
Section: Chapter Questions
Problem 5BCRQ
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