Hammer and Nail formed a partnership. Hammer contributed equipment with original cost of P370,000 and fair value of P300,000 while Nail contributed cash of P180,000. Hammer and Nail agreed to have a 60:40 interest in the partnership and that their initial capital credits should reflect this fact. A partner's capital account should be increased accordingly by way of additional cash investment. Which of the partners should make an additional investment and by how much?
Hammer and Nail formed a partnership. Hammer contributed equipment with original cost of P370,000 and fair value of P300,000 while Nail contributed cash of P180,000. Hammer and Nail agreed to have a 60:40 interest in the partnership and that their initial capital credits should reflect this fact. A partner's capital account should be increased accordingly by way of additional cash investment. Which of the partners should make an additional investment and by how much?
Chapter21: Partnerships
Section: Chapter Questions
Problem 57P
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2. Under
Transcribed Image Text:2. Hammer and Nail formed a partnership. Hammer contributed
equipment with original cost of P370,000 and fair value of
P300,000 while Nail contributed cash of P180,000. Hammer
and Nail agreed to have a 60:40 interest in the partnership and
that their initial capital credits should reflect this fact. A
partner's capital account should be increased accordingly by
way of additional cash investment. Which of the partners
should make an additional investment and by how much?
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