Sanchez and Torres are forming a partnership, Organic Leather Goods, to import merchandise from Spain. Sanchez is especially artistic and will travel to Spain to buy the merchandise. Torres is a super salesman and has already lined up several department stores to sell the leather goods. Read the requirements. Requirement 1. What is the purpose of the partnership agreement? The purpose of the partnership agreement is to increase the partners' understanding of how the business is run. Requirement 2. If the partnership agreement does not state the profit-and-loss-sharing ratios, how will profits or losses be shared? If the partnership agreement does not state the profit-and-loss-sharing ratios, the profits or losses are shared equally. Requirement 3. Sanchez is contributing $145,000 in cash and accounts payable of $35,000. Torres is contributing a building that cost Torres $75,000. The building's current market value is $85,000. Journalize the contribution of the two partners. (Record debits first, then credits. Select the explanation on the last line of the journal entry table.) Begin by journalizing Sanchez's investment. Sanchez is contributing $145,000 in cash and accounts payable of $35,000. Requirements Date Cash Accounts and Explanation Accounts Payable Sanchez, Capital Building Debit Credit 1. What is the purpose of the partnership agreement? 2. If the partnership agreement does not state the profit-and-loss-sharing ratios, how will profits or losses be shared? 3. Sanchez is contributing $145,000 in cash and accounts payable of $35,000. Torres is contributing a building that cost Torres $75,000. The building's current market value is $85,000. Journalize the contribution of the two partners. Print Done