Kiko Contis and Heaven Santos formed a partnership with the contributions: - Kiko Contis contributed a parcel of land which costs his father P100,000. The land has a fair market value of P150,000 when the land was inherited by him 3 years ago and currently has a fair market value of P 200,000 and cash of 50,000. - Heaven Santos on the other hand contributed sufficient cash equal to 3/4 of Kiko Contis capitalization. Questions 1. At what amount should land be valued in the partnership book? 2. At what amount should Kiko Contis capital account be credited? 3. Assuming that the land is sold for 220,000 a week after the formation, what amount should be recorded as Contis' capital account balance during the partnership formation?
Problem:
Kiko Contis and Heaven Santos formed a partnership with the contributions:
- Kiko Contis contributed a parcel of land which costs his father P100,000. The land has a fair market value of P150,000 when the land was inherited by him 3 years ago and currently has a fair market value of P 200,000 and cash of 50,000.
- Heaven Santos on the other hand contributed sufficient cash equal to 3/4 of Kiko Contis capitalization.
Questions
1. At what amount should land be valued in the partnership book?
2. At what amount should Kiko Contis capital account be credited?
3. Assuming that the land is sold for 220,000 a week after the formation, what amount should be recorded as Contis' capital account balance during the partnership formation?
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