PROBLEM 4 MULTIPLE CHOICE COMPUTATI NAL Twinkle, Sheep and Bus formed a partnership Twinkle contributed cash of P 8 0 , 0 0 0 Sheep contributed equipment with historical cost of P 7 0 0 , 0 0 0 , carrying amount of P 1 8 0 , 0 0 0 , and fair value of P 9 0 , 0 0 0 Bus contributed building with historical cost of P 1 , 0 0 0 , 0 0 0 , carrying amount of P 4 8 0 , 0 0 0 , and fair value of P 6 9 0 , 0 0 0 The partnership will assume the unpaid mortgage of P 5 8 0 , 0 0 0 on the building Which partner has the largest capital account balance on partnership formation a Twinkle c Bus b Sheep d None, all are equal Hammer and Nail formed a partnership Hammer contributed equipment with original cost of P 3 7 0 , 0 0 0 and fair value of P 3 0 0 , 0 0 0 while Nail contributed cash of P 1 8 0 , 0 0 0 Hammer and Nail agreed to have a 6 0 4 0 interest in the partnership and that their initial capital credits should reflect this fact A partner's capital account should be increased accordingly by way of additional cash investment Which of the partners should make an additional investment and by how much a Hammer, P 2 0 , 0 0 0 c Hammer, P 7 0 , 0 0 0 b Nail, P 2 0 , 0 0 0 d Nail, P 7 0 , 0 0 0

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PROBLEM 4 : MULTIPLE CHOICE - COMPUTATI NAL Twinkle, Sheep and Bus formed a partnership. Twinkle contributed cash of P 8 0 , 0 0

PROBLEM

4

: MULTIPLE CHOICE

-

COMPUTATI

NAL

Twinkle, Sheep and Bus formed a partnership. Twinkle contributed cash of

P 80, 000 .

Sheep contributed equipment with historical cost of

P 700, 000,

carrying amount of

P 180, 000,

and fair value of

P 90, 000 .

Bus contributed building with historical cost of

P 1, 000, 000,

carrying amount of

P 480, 000,

and fair value of

P 690, 000 .

The partnership will assume the unpaid mortgage of

P 580, 000

on the building. Which partner has the largest capital account balance on partnership formation?

.

Twinkle

.

Bus

.

Sheep

.

None, all are equal

Hammer and Nail formed a partnership. Hammer contributed equipment with original cost of

P 370, 000

and fair value of P

300, 000

while Nail contributed cash of

P 180, 000 .

Hammer and Nail agreed to have a

60

40

interest in the partnership and that their initial capital credits should reflect this fact. A partner's capital account should be increased accordingly by way of additional cash investment. Which of the partners should make an additional investment and by how much?