John, Jeff and Jane, decided to engage in a real estate venture as a partnership. John invested, P100,000.00 cash and Jeff provided an office equipment that is carried in the books at P82,000.00. The partner agree that the equipment has a fair value of P110,000.00. There is a P30,000.00 note payable remaining on the equipment to be assumed by the partnership. Although Jane has no physical assets to invest in the partnership, both John and Jeff believe that her experience as a real estate appraiser is a valuable skill needed by the partnership and is a basis for granting her capital interest in the partnership. REQUIRED: A. Record the partnership formation under the bonus method B. Record the partnership formation under the goodwill (revaluation of asset) method and assume a total goodwill (or total adjustment) of P90,000.00 C. Discuss the appropriateness of using either the bonus or goodwill methods to record the formation of the partnership

John, Jeff and Jane, decided to engage in a real estate venture as a partnership. John invested, P100,000.00 cash and Jeff provided an office equipment that is carried in the books at P82,000.00. The partner agree that the equipment has a fair value of P110,000.00. There is a P30,000.00 note payable remaining on the equipment to be assumed by the partnership. Although Jane has no physical assets to invest in the partnership, both John and Jeff believe that her experience as a real estate appraiser is a valuable skill needed by the partnership and is a basis for granting her capital interest in the partnership. REQUIRED: A. Record the partnership formation under the bonus method B. Record the partnership formation under the goodwill (revaluation of asset) method and assume a total goodwill (or total adjustment) of P90,000.00 C. Discuss the appropriateness of using either the bonus or goodwill methods to record the formation of the partnership

SWFT Corp Partner Estates Trusts

42nd Edition

ISBN:9780357161548

Author:Raabe

Publisher:Raabe

Chapter13: Comparative Forms Of Doing Business

Section: Chapter Questions

Problem 54P

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