Asun and Rita agreed to convert the sole proprietorship of Rita into a partnership. Before the agreed formation, the assets and liabilities of Rita’s sole proprietorship’s business are 300,000 and 100,000 respectively. They agreed to contribute the partnership's capital equally to share profit and loss equally. If the assets of Rita’s sole proprietorship are valued at 200,000, how much should Rita contribute as additional cash investment in the total agreed capitalization of 250,000?

SWFT Comprehensive Volume 2019
42nd Edition
ISBN:9780357233306
Author:Maloney
Publisher:Maloney
Chapter21: Partnerships
Section: Chapter Questions
Problem 31P
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Asun and Rita agreed to convert the sole proprietorship of Rita into a partnership. Before the
agreed formation, the assets and liabilities of Rita’s sole proprietorship’s business are 300,000 and
100,000 respectively. They agreed to contribute the partnership's capital equally to share profit and
loss
equally. If the assets of Rita’s sole proprietorship are valued at 200,000, how much should Rita
contribute as additional cash investment in the total agreed capitalization of 250,000?
A. 250,000

B. 100,000
C. 50,000
D. 25,000

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