1.Bonnie and Clyde enters into a partnership agreement in which Bonnie is to have 40% interest in the partnership and 35% in the profits and losses, while Clyde will have 60% interest in the partnership and 65% in the profits and losses. Bonnie contributed the following:

Cost Fair value

Building 235,000 255,000

Equipment 168,000 156,000

Land 500,000 525,000

The building and the equipment has a mortgage of 50,000 and 35,000 respectively. Clyde is to contribute 150,000 cash and equipment. The partners agreed that only the building mortgage will be assumed by the partnership.

a.How much is the fair market value of the equipment which Clyde contributed?

b.How much is the total asset of the partnership upon formation?