Wreck and Ralph form a new partnership. Wreck invests P500,000 in cash. Ralph contributes land that has an original cost of P400,000 and a fair market value of P300,000, and a building that has a tax value basis of P400,000 and a fair market value of P500,000. The building is subject to a P120,000 mortgage that the partnership will assume. They agreed to have equal interest. Wha is the impact of the bonus method?
Wreck and Ralph form a new partnership. Wreck invests P500,000 in cash. Ralph contributes land that has an original cost of P400,000 and a fair market value of P300,000, and a building that has a tax value basis of P400,000 and a fair market value of P500,000. The building is subject to a P120,000 mortgage that the partnership will assume. They agreed to have equal interest. Wha is the impact of the bonus method?
Chapter21: Partnerships
Section: Chapter Questions
Problem 28P
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Transcribed Image Text:Wreck and Ralph form a new partnership. Wreck invests P500,000 in cash. Ralph contributes land that has an original cost of
P400,000 and a fair market value of P300,000, and a building that has a tax value basis of P400,000 and a fair market value of
P500,000. The building is subject to a P120,000 mortgage that the partnership will assume. They agreed to have equal interest. What
is the impact of the bonus method?
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