Gerald and Julia are joining their separate businesses to form a partnership and they agreed to share profits in the manner of 55% for Gerald and 45% for Julia. Property is to be contributed for a total capital of P800,000. The partners agreed to make their capital accounts equal after formation. Gerald Book Value Fair Value 60,000 90,000 Accounts Receivable 60,000 Inventories 60,000 100,000 Equipment Accounts Payable 80,000 30,000 30,000 Julia Book Value Fair Value Accounts Receivable Inventories 160,000 180,000 Equipment Accounts Payable 180,000 20,000 190,000 20,000
Gerald and Julia are joining their separate businesses to form a partnership and they agreed to share profits in the manner of 55% for Gerald and 45% for Julia. Property is to be contributed for a total capital of P800,000. The partners agreed to make their capital accounts equal after formation. Gerald Book Value Fair Value 60,000 90,000 Accounts Receivable 60,000 Inventories 60,000 100,000 Equipment Accounts Payable 80,000 30,000 30,000 Julia Book Value Fair Value Accounts Receivable Inventories 160,000 180,000 Equipment Accounts Payable 180,000 20,000 190,000 20,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question: How much cash must be contributed by each of the partners after they contributed their properties?
PLEASE PROVIDE THE ANSWERS WITH SOLUTION IN A GOOD ACCOUNTING FORM.
Transcribed Image Text:Gerald and Julia are joining their separate businesses to form a partnership and they agreed to share profits in
the manner of 55% for Gerald and 45% for Julia. Property is to be contributed for a total capital of P800,000.
The partners agreed to make their capital accounts equal after formation.
Gerald
Book Value Fair Value
Accounts Receivable
60,000
60,000
Inventories
60,000
90,000
100,000
Equipment
Accounts Payable
80,000
30,000
30,000
Julia
Book Value Fair Value
Accounts Receivable
Inventories
160,000
180,000
190,000
Equipment
Accounts Payable
180,000
20,000
20,000
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