Advanced Financial Accounting
Advanced Financial Accounting
12th Edition
ISBN: 9781259916977
Author: Christensen, Theodore E., COTTRELL, David M., Budd, Cassy
Publisher: Mcgraw-hill Education,
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Chapter 15, Problem 15.1.5E

Multiple-Choice on Initial Investment [AICPA Adapted]
Select the correct answer for each of the following questions.

 5. On July 1, Mabel and Pierre formed a partnership, agreeing to share profits and losses in the ratio of 4:6 respectively. Mabel contributed a parcel of land that cost her $25,000. Pierre contributed $50,000 cash. The land sold for $50,000 on July 1, four hours after formation of the partnership. How much should be recorded in Marbel’s capital account on the partnership formation?

  1. $10,000.
  2. $20,000.
  3. $25,000.
  4. $50,000.

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