James and Laura are forming a partnership. James will Invest a truck with a book value of $10,000 and a fair market value of $14,000. Laura will Invest a bullding with a book value of $30,000 and a fair market value of $42,000 with a mortgage of $15,000. Answer the following questions: 1- At what amount should the bullding be recorded? 2- What amount should be recorded in Laura's capital account? 3- What amount should be recorded in James' capital account?

James and Laura are forming a partnership. James will Invest a truck with a book value of $10,000 and a fair market value of $14,000. Laura will Invest a bullding with a book value of $30,000 and a fair market value of $42,000 with a mortgage of $15,000. Answer the following questions: 1- At what amount should the bullding be recorded? 2- What amount should be recorded in Laura's capital account? 3- What amount should be recorded in James' capital account?

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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Charlie and Delta formed a partnership. Charlie invested cash worth P85,000 and a machine. On the other hand, Delta contributed cash worth P55,000 and an equipment which has a mortgage of P35.000 which Delta will pay personally The total capital after formation was P350,000. They also further agreed to reflect 55:45 ratio as to their capital balances respectively. No other investment or withdrawal occurred other than mentioned to reflect their capital ratio agreement. How much is the fair value of the machine?
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