Proposal A: Jessica will contribute to the partnership $45,000 of cash, as well as equipment that cost Jessica $10,000 but has a current market value of $15,000. Jessica will receive a 25% share of the profits and a 20% share of the capital. Proposal B: Jessica will pay $20,000 directly to each of Harinder and Maryka, to purchase part of their share of the partnership. Harinder and Maryka will each transfer 20% of their capital to Jessica, who will have a 25% share of the profits.
Proposal A: Jessica will contribute to the partnership $45,000 of cash, as well as equipment that cost Jessica $10,000 but has a current market value of $15,000. Jessica will receive a 25% share of the profits and a 20% share of the capital. Proposal B: Jessica will pay $20,000 directly to each of Harinder and Maryka, to purchase part of their share of the partnership. Harinder and Maryka will each transfer 20% of their capital to Jessica, who will have a 25% share of the profits.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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