200. On December 1, 2014, MG and AN are combining their separate businesses to form a partnership. Cashand noncash assets are to be contributed. The noncash assets to be contributed and the liabilities to beassumed are as follows:Accounts ReceivableInventoryPPEAccounts PayableMGBook value250,000400,0001,000,000150,000A. 1,344,000B. 1,244,000C. 3,120,000D. 2,180,000Fair value262,500450,000912,500150,000ANBook value200,000200,000862,500112,500Fair value195,000207,500822,500112,500MG and AN are to invest equal amount of cash such that the contribution of MG would be 10%more than the investment of AN.What is the amount of cash presented on the partnership's statement of Financial Position onDecember 1, 2014?

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What is the amount of cash presented on the partnership's statement of Financial Position on December 1, 2014?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

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Question

200. On December 1, 2014, MG and AN are combining their separate businesses to form a partnership. Cash
and noncash assets are to be contributed. The noncash assets to be contributed and the liabilities to be
assumed are as follows:
Accounts Receivable
Inventory
PPE
Accounts Payable
MG
Book value
250,000
400,000
1,000,000
150,000
A. 1,344,000
B. 1,244,000
C. 3,120,000
D. 2,180,000
Fair value
262,500
450,000
912,500
150,000
AN
Book value
200,000
200,000
862,500
112,500
Fair value
195,000
207,500
822,500
112,500
MG and AN are to invest equal amount of cash such that the contribution of MG would be 10%
more than the investment of AN.
What is the amount of cash presented on the partnership's statement of Financial Position on
December 1, 2014?

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