Abner and Bimbo have just formed a partnership. Abner contributed cash of $2,346,000 and office equipment that cost $1,170,000. The equipment had been used in the sole proprietorship and had been 80% depreciated. The current fair value of the equipment is $756,000. An unpaid mortgage loan on the equipment of $252,000 will be assumed by the partnership. Abner is to have a 60% interest in the partnership net assets. Bimbo is to contribute, only, merchandise with a fair value of $1,890,000. Both partners agreed on a profit and loss ratio of 55% to Abner and the balance to Bimbo. Required: Choose the correct answer with solution. 1. To finalize the partnership agreement, Abner should make additional investment (withdrawal) of cash in the amount of. a. $ (36,000) b. $ (540,000) c. $ 264,000 d. $ (15,000)
Abner and Bimbo have just formed a partnership. Abner contributed cash of $2,346,000 and office equipment that cost $1,170,000. The equipment had been used in the sole proprietorship and had been 80% depreciated. The current fair value of the equipment is $756,000. An unpaid mortgage loan on the equipment of $252,000 will be assumed by the partnership. Abner is to have a 60% interest in the partnership net assets. Bimbo is to contribute, only, merchandise with a fair value of $1,890,000. Both partners agreed on a profit and loss ratio of 55% to Abner and the balance to Bimbo. Required: Choose the correct answer with solution. 1. To finalize the partnership agreement, Abner should make additional investment (withdrawal) of cash in the amount of. a. $ (36,000) b. $ (540,000) c. $ 264,000 d. $ (15,000)
Chapter21: Partnerships
Section: Chapter Questions
Problem 36P
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Question
Abner and Bimbo have just formed a partnership . Abner contributed cash of $2,346,000 and office equipment that cost $1,170,000. The equipment had been used in the sole proprietorship and had been 80% depreciated. The current fair value of the equipment is $756,000. An unpaid mortgage loan on the equipment of $252,000 will be assumed by the partnership. Abner is to have a 60% interest in the partnership net assets.
Bimbo is to contribute, only, merchandise with a fair value of $1,890,000. Both partners agreed on a profit and loss ratio of 55% to Abner and the balance to Bimbo.
Required:
Choose the correct answer with solution.
1. To finalize the partnership agreement, Abner should make additional investment (withdrawal) of cash in the amount of.
a. $ (36,000)
b. $ (540,000)
c. $ 264,000
d. $ (15,000)
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