On January 1, 20x1, Rody and Noy formed a partnership. Rody and Noy contributed the following assets at formation: Rody Noy Cash 25,000 37,500 Inventory 18,750 Building 50,000 Equipment 18,750 The building is subject to a P12,500 mortgage, which was assumed by the partnership. They share profit and loss in the ratio of 60:40. Assuming Rody will invest (withdraw) cash so that his capital balance will equal to his profit and loss ratio, what is the total asset of the partnership after formation? (The correct answer is 246,875 but I need a solution/explanation)
On January 1, 20x1, Rody and Noy formed a partnership. Rody and Noy contributed the following assets at formation: Rody Noy Cash 25,000 37,500 Inventory 18,750 Building 50,000 Equipment 18,750 The building is subject to a P12,500 mortgage, which was assumed by the partnership. They share profit and loss in the ratio of 60:40. Assuming Rody will invest (withdraw) cash so that his capital balance will equal to his profit and loss ratio, what is the total asset of the partnership after formation? (The correct answer is 246,875 but I need a solution/explanation)
SWFT Essntl Tax Individ/Bus Entities 2020
23rd Edition
ISBN:9780357391266
Author:Nellen
Publisher:Nellen
Chapter14: Partnerships And Limited Liability Entities
Section: Chapter Questions
Problem 2BD
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Question
Problem 1: On January 1, 20x1, Rody and Noy formed a
Rody |
Noy |
|
Cash |
25,000 |
37,500 |
Inventory |
18,750 |
|
Building |
50,000 |
|
Equipment |
18,750 |
The building is subject to a P12,500 mortgage, which was assumed by the partnership. They share
Assuming Rody will invest (withdraw) cash so that his capital balance will equal to his profit and loss ratio, what is the total asset of the partnership after formation?
(The correct answer is 246,875 but I need a solution/explanation)
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