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.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Ff97c45d1-d7ad-4fe7-b4c6-fc149daaeb95%2F60a9fe91-0a80-4422-a86d-c0aa4e44d57c%2Fidp7i1_processed.jpeg&w=3840&q=75)
Transcribed Image Text: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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