Elsa and Perla form a new partnership. Elsa invests P 300, 000 in cashfor her 60% interest in the capital and profits of the business. Perlacontributes land that has an original cost of P 40, 000 and a fair marketvalue of P 70, 000 and a building that has a tax basis of P 50, 000 and afair market value of P 90, 000. The building is subject to a P 40, 000mortgage that the partnership will assume. What amount of cash shouldPerla contribute? *•110, 000• 80, 000O : 150, 000O :40, 000

Whenever a partner makes investment in partnership in the form of assets other than cash, then the…

• Elsa and Perla form a new partnership. Elsa invests P 300, 000 in cash for her 60% interest in the capital and profits of the business. Perla contributes land that has an original cost of P 40, 000 and a fair market value of P 70, O00 and a building that has a tax basis of P 50, 000 and a fair market value of P 90, 000. The building is subject to a P 40, 000 mortgage that the partnership will assume. What amount of cash should Perla contribute? * •110, 000 • 80, 000 •150, 000 • 40, 000

• Elsa and Perla form a new partnership. Elsa invests P 300, 000 in cash for her 60% interest in the capital and profits of the business. Perla contributes land that has an original cost of P 40, 000 and a fair market value of P 70, O00 and a building that has a tax basis of P 50, 000 and a fair market value of P 90, 000. The building is subject to a P 40, 000 mortgage that the partnership will assume. What amount of cash should Perla contribute? * •110, 000 • 80, 000 •150, 000 • 40, 000

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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