Question: A and B form a new partnership with 60% , 40 % respectively interests in capital and profits. A invests $100,000 cash and inventories with

A and B form a new partnership with 60% , 40 % respectively interests in capital and profits. A invests $100,000 cash and inventories with book value 50000 and a fair value 40000. B invests $50,000 in cash and a land with a book value 80,000 and a fair value 120,000, there is 50,000 a mortgage on land to the bank the partnership agrees to assume .

Required:

1) Determine the total partnership capital under bonus?

2) Make journal entry to record initial investment by B?

3) What is the final capital balance to A under bonus?

4) What is the total partnership capital under goodwill?

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