A partner invests into a partnership a building with a P25,000 carrying value and P40,000 fair market value. The related mortgage payable of P12,500 is assumed by the partnership. The entry to record the investment in partnership is: a. Building Mortgage Payable Capital b. Building Mortgage Payable Capital c. Capital O A OB O C O D Mortgage Payable Building d. Capital Mortgage Payable Building 40,000 25,000 25,000 40,000 12,500 12,500 12,500 27,500 12,500 27,500 12,500 12,500

A partner invests into a partnership a building with a P25,000 carrying value and P40,000 fair market value. The related mortgage payable of P12,500 is assumed by the partnership. The entry to record the investment in partnership is: a. Building Mortgage Payable Capital b. Building Mortgage Payable Capital c. Capital O A OB O C O D Mortgage Payable Building d. Capital Mortgage Payable Building 40,000 25,000 25,000 40,000 12,500 12,500 12,500 27,500 12,500 27,500 12,500 12,500

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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= Admitting New Partner Who Contributes Assets After the tangible assets have been adjusted to current market prices, the capital accounts of Elayne Summers and Murv Newcomb have balances of $99,000 and $149,000, respectively. Rose Clayton is to be admitted to the partnership, contributing $66,000 cash to the partnership, for which she is to-receive an ownership equity of $86,000. All partners share equally in income. a. Journalize the entry to record the admission of Rose Clayton, who is to receive a bonus of $20,000. If an amount box does not require an entry, leave it blank. b. What are the capital balances of each partner after the admission of the new partner? Partner ▼ Elayne Summers Murv Newcomb Rose Clayton $ Balance c. Why are tangible assets adjusted to current market prices prior to admitting a new partner? Tangible assets should be adjusted to current market prices so that the new partner being admitted. For example, if the market price of land doubled prior to admitting…
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