Non-cash Assets Land Building Machinery and Equipment Cost P 100,000 1,000,000 500,000 Comments Cost is equal to the fair value Fair value of which is 80% of its cost Fair value of which is 70% of its cost There is a P200,000 mortgage on the building which the partners agree not to assume in the partnership. A contributes cash on P650,000. Compute the total assets of the partnership upon formation.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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A and B enter into a partnership agreement in which B contributes the following:
Non-cash Assets
Land
Building
Machinery and Equipment
Cost
P 100,000
1,000,000
500,000
Comments
Cost is equal to the fair value
Fair value of which is 80% of its cost
Fair value of which is 70% of its cost
There is a P200,000 mortgage on the building which the partners agree not to assume in the partnership. A contributes cash of
P650,000.
Compute the total assets of the partnership upon formation.
Transcribed Image Text:A and B enter into a partnership agreement in which B contributes the following: Non-cash Assets Land Building Machinery and Equipment Cost P 100,000 1,000,000 500,000 Comments Cost is equal to the fair value Fair value of which is 80% of its cost Fair value of which is 70% of its cost There is a P200,000 mortgage on the building which the partners agree not to assume in the partnership. A contributes cash of P650,000. Compute the total assets of the partnership upon formation.
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