Abel and Baker decided to form a partnership. Abel contributed equipment (book value $65,000), inventory (paid $20,000),

Question:

Abel and Baker decided to form a Abel contributed equipment (book value $65,000), inventory (paid $20,000), and $10,000 cash. The equipment and inventory have a current market value of $40,000 and $15,000 respectively. Abel also had a debt of $20,000 for the equipment. Baker contributed office equipment (book value $20,000) and cash of $50,000. The current market value of the office equipment is $10,000. The two partners fail to agree on a profit-and-loss-sharing ratio. For the first month (June 2014), the lost $4,000.
1. How much of this loss goes to Abel? How much goes to Baker?
2. The partners withdrew no assets during June. What is each partner's Capital balance at June 30? Prepare a T-account for each partner's Capital.
Partnership
A legal form of business operation between two or more individuals who share management and profits. A Written agreement between two or more individuals who join as partners to form and carry on a for-profit business. Among other things, it states...