Froilan Labausa contributed land, inventory, and P280,000 cash to a partnership. The land has a book value of P650,000 and a market value of P1,350,000. The inventory has a book value of P600,000 and a market value of P510,000, The partnership also assumed a P350,000 note payable owed by Labausa that was used to purchase the land. Rosalie Balhag agreed to put up cash equivalent to Labausa's net investment. Required: Prepare the journal entry to record Labausa's and Balhag's investment in the partnership.

Froilan Labausa contributed land, inventory, and P280,000 cash to a partnership. The land has a book value of P650,000 and a market value of P1,350,000. The inventory has a book value of P600,000 and a market value of P510,000, The partnership also assumed a P350,000 note payable owed by Labausa that was used to purchase the land. Rosalie Balhag agreed to put up cash equivalent to Labausa's net investment. Required: Prepare the journal entry to record Labausa's and Balhag's investment in the partnership.

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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Question

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Problem #1
Partner's Original Investment
Froilan Labausa contributed land, inventory, and P280,000 cash to a partnership. The
land has a book value of P650,000 and a market value of P1,350,000. The inventory has
a book value of P600,000 and a market value of P510,000. The partnership also
assumed a P350,000 note payable owed by Labausa that was used to purchase the land.
Rosalie Balhag agreed to put up cash equivalent to Labausa's net investment.
Required:
Prepare the journal entry to record Labausa's and Balhag's investment in the
partnership.

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