Prepare the journat entries to record the 1ormation of the partnership
Chapter11: Partnerships: Distributions, Transfer Of Interests, And Terminations
Section: Chapter Questions
Problem 41P
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Transcribed Image Text:(Cash and Non-cash Contributions; Bonus)
Aguirre and Aranas have decided to form a, partnership. Aguirre contributes cash of
PI,000,000 and Aranas contributes land with a fair market value of P800,000 and a
building with a fair market value of PI,900,000. Aranas purchased the land and building
five years ago for P750,000. Aranas' book value of the land is P175,000 and the book
value of the building is P600,000. The PI.500,000 mortgage on the land and building is to
be assumed by the partnership. The partners agree to share profits and losses in the ratio of
3:2, respectively.
Instructions: 1Prepare the journat entries to record the formation of the partnership under
cach of the following independent assumptions:
Each partner is credited for the full amount of net assets invested.
2.
Each partner initially is to have equal interest in partnership capital.
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ISBN:
9780357109731
Author:
Hoffman
Publisher:
CENGAGE LEARNING - CONSIGNMENT