1. The following items are being invested by two sole proprietors, Diona and Diluc, to form DD Partnership: Agreed Values Investment by Investment by Diona Diluc Cash P 120,000| P 120,000 Inventory 120,000 Land 240,000 Building 480,000 Equipment 240,000 Mortgage on building assumed by the 240,000 partnership

1. The following items are being invested by two sole proprietors, Diona and Diluc, to form DD Partnership: Agreed Values Investment by Investment by Diona Diluc Cash P 120,000| P 120,000 Inventory 120,000 Land 240,000 Building 480,000 Equipment 240,000 Mortgage on building assumed by the 240,000 partnership

SWFT Essntl Tax Individ/Bus Entities 2020

23rd Edition

ISBN:9780357391266

Author:Nellen

Publisher:Nellen

Chapter7: Property Transactions: Basis, Gain And Loss, And Nontaxable Exchanges

Section: Chapter Questions

Problem 3BD

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The following items are being invested by A and B to form AB Partnership Agreed Cash Inventory Land Building Equipment Total Mortgage on building assumed by the partnership Investment by A 120,000.00 120,000.00 240,000.00 480,000.00 480.000.00 Values Investment by B 120,000.00 240,000.00 480,000.00 840,000.00 240,000.00 600.000.00 REQUIRED: A. Prepare entries to record the formation of partnership assuming that A and B agree that each partner is to receive a capital credit equal to the agreed values of the net assets each partner invested. B. Prepare entities to record the formation of the partnership assuming that A and B agreed that each partner is to receive an equal capital investment.
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