Question
1. R and D formed a partnership on February 10, 2020. R contributed cash of $150,000, while D contributed inventory with a fair value of
1. R and D formed a partnership on February 10, 2020. R contributed cash of $150,000, while D contributed inventory with a fair value of $120,000. Due to R's expertise in selling, D agreed that R should have 60 percent of the total capital of the partnership. R and D agreed to recognize goodwill. Give journal entries for the partnership formation
2. Luqmaan and Idris drafted a partnership agreement that lists the following assets contributed at the partnership's formation:
| Contributed by | |
| Luqmaan | Idris |
Cash | $20,000 | $30,000 |
Inventory | 0 | 15,000 |
Building | 0 | 40,000 |
Furniture & Equipment | 15,000 | 0 |
The building is subject to a mortgage of $10,000, which the partnership has assumed. The partnership agreement also specifies that profits and losses are to be distributed evenly. Give journal entries.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
![blur-text-image](https://dsd5zvtm8ll6.cloudfront.net/includes/images/document_product_info/blur-text-image.webp)
Get Instant Access with AI-Powered Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
![blur-text-image](https://dsd5zvtm8ll6.cloudfront.net/includes/images/document_product_info/blur-subtext-image.webp)
Step: 3
![blur-text-image](https://dsd5zvtm8ll6.cloudfront.net/includes/images/document_product_info/blur-subtext-image.webp)
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started