AAA and BBB combined their sole proprietorships to form a partnership. AAA contributed cash of P6,615,000 and office equipment that cost P2,835,000. The equipment had been used and had been 70% depreciated, the fair value of the equipment is P1,890,000. AAA also contributed a note payable of P630,000 to be assumed by the partnership. AAA is to have a 60% interest in the partnership. BBB contributed only P4,725,000 merchandise inventory at fair value. The partners’ capital should be in conformity with their interest in the partnership. After the formation, the partners agreed to share profits and losses equally. Assuming the use of the bonus method, how much is the increase (decrease) in the capital of BBB as a result of the transfer of capital? A. 945,000 B. (100,800) C. 315,000 D. 525,000
AAA and BBB combined their sole proprietorships to form a
A. 945,000
B. (100,800)
C. 315,000
D. 525,000
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