Question: On January 1, 2014, Robert Morris contributes land in a partnership with Andy Phillips. Morris purchased the land in 2010 for $300,000. A real estate

On January 1, 2014, Robert Morris contributes land in a partnership with Andy Phillips. Morris purchased the land in 2010 for $300,000. A real estate appraiser now values the land at $700,000. Morris wants $700,000 capital in the new partnership, but Phillips objects. Phillips believes that Morris's capital contribution should be measured by the book value of his land. Phillips and Morris seek your advice.
1. Which value of the land is appropriate for measuring Morris's capital-book value or current market value?
2. Give the partnership's journal entry to record Morris's contribution in the business.

Step by Step Solution

★★★★★

3.44 Rating (163 Votes )

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock

tr msoheightsourceauto col msowidthsourceauto br msodataplacementsamecell style0 msonumberformatGeneral textaligngeneral verticalalignbottom whitespacenowrap msorotate0 msobackgroundsourceauto msopatt... View full answer

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Document Format (1 attachment)

907-B-A-L (6346).xlsx

300 KBs Excel File

Students Have Also Explored These Related Accounting Questions!

On January 1, 2014, Cayce Corporation acquired 100 percent of Simbel Company for consideration paid of $126,000, which was equal to fair value. Cayce is a U.S.-based company headquartered in Buffalo,...

On January 1, 2014, Ellen Greene Company makes the two following acquisitions. 1. Purchases land having a fair value of $200,000 by issuing a 5-year, zero-interest-bearing promissory note in the face...

On January 1, 2014, Fisher Company makes the two following acquisitions. 1. Purchases land having a fair market value of $800,000 by issuing a 5-year, zero-interest-bearing promissory note in the...

S12-2 Accounting for partner contributions On January 1, 2014, Robert Morris contributes land in a partnership with Andy Phillips. Morris purchased the land in 2010 for $300,000. A real estate...

Robert Morris invests land in a partnership with Andy Phillips. Morris purchased the land in 2012 for $300,000. A real estate appraiser now values the land at $700,000. Morris wants $500,000 capital...

On January 1, 2014, Steven Mables contributes land in a partnership with Fred Williams Maths purchased the land in 2010 for $200,000. A real estate appraiser now values the land at $425,000. Mables...

I need to get help with this case study PwC Case Studies in Taxation, 2013, PwC, LLP FLATIRONS, INC. Flatirons, Inc. (dba Flatirons Flapjacks Caf) specializes in unique breakfast and brunch menus and...

Hi I know you opted out of an earlier question. I have several open questions. I really need to get them in. Would you be willing to take any of these questions? I have been waiting for 3 days. I...

question 3-5 needs help to be answered question 5 country for taxation is MALAYSIA. question 4 needs help. can zoom in. SECTION A: PRACTICAL QUESTIONS TOTAL: 100 MARKS Answer FOUR (4) out of FIVE (5)...

IM Me with price and any questions SIGNATURE PROJECT ACC432A June 2014 WARDENS' 2013 TAX RETURN CCH BOOKLET TITLED: 2014 Edition Individuals', Corporation, partnership, and Fiduciary Fact Patterns...

Calculate the purchase price for a 52-week, 51,000 treasury bill with a stated interest rate of 1.25 percent.

Suppose that you are the owner of all stock in ACorp and BCorp Now ACorp owns all of CCorp and 49 of DCorp CCorp owns the remaining 51 of DCorp These are all domestic includable corporations that...

Cost of Goods Sold is calculated by _ _ _ _ _ _ _ _ _ _ _ _ _ _ and then subtracting the ending inventory. Choix de groupe de r ponses subtracting the net purchases from the net sales adding the...

Describe the circumstances in which the distribution of sample means is normal and, in these circumstances, find the probability associated with a specific sample.

List the four financial statements. Briefly describe each statement.

What are two certifications available for accountants? Briefly explain each-certification.

A. Set up an amortization schedule for a $30,000 loan to be repaid in equal installments at the end of each of the next 20 years at an interest rate of 10 percent. What is the annual payment? How...

I am stuck trying to solve both questions The current price of a stock is $50.02 and the annual effective risk-free rate is 2.4 percent. A call option with an exercise price of $55 and one year until...

Sonia Gomez, a 45-year-old woman, wishes to accumulate $250,000 over the next 15 years to supplement the retirement programs that are being funded by the federal government and her employer. She...