1. FORMATION> Abe and Babe decide to form a partnership on Jan. 1, 1999. From their own businesses or personal assets they contribute the following assets which are shown at book value. $0 >>>> Abe contributes: Cash A-Rec Allow-Bad-Debt Inv Equipment Acc-Depr Total Assets BALANCE SHEET of Mr. Abe before forming Partnership $4,500 A-Pay 22,500 -1,500 21,000 19,750 32,000 -18,000 14,000 A, Capital $59,250 Total Liab + Equity 59,250 $59,250 Babe contributes from his books: CASH - $30,000, ACCOUNTS PAYABLE $10,000 AND A 1957 RUSTY CHEVY $1,200 a. Abe and Babe agree that the fair value of the store equipment is $10,000, inventory is $20,000, and net receivables is $19,500. Babe's Chevy is worth $2,000. (1) Record separate entries for each partner using the above data. Start a new set of books. (2) * What would Babe's entry be if they agreed he would have equal percentage interest in the partnership? (3) ** What would Abe's entry be if they agreed $7,000 goodwill related to Abe's business. b. Re-do (1) but use Abe's existing books for the partnership