On April 30, 20X5, Apple, Blue, and Crown formed a partnership by combining their separate business proprietorships.
Question:
On April 30, 20X5, Apple, Blue, and Crown formed a partnership by combining their separate business proprietorships. Apple contributed $50,000 cash. Blue contributed property with a $36,000 carrying amount, a $40,000 original cost, and $80,000 fair value. The partnership accepted responsibility for the property’s
$35,000 mortgage. Crown contributed equipment with a $30,000 carrying amount, a $75,000 original cost, and $55,000 fair value. The partnership agreement specifies that profits and losses are to be shared equally but is silent regarding capital contributions. Which partner’s capital account has the largest April 30, 20X5, balance?
a. Apple
b. Blue
c. Crown
d. All capital account balances are equal.
Step by Step Answer:
Advanced Financial Accounting
ISBN: 9781260165111
12th Edition
Authors: Theodore Christensen, David Cottrell, Cassy Budd