CASE 2:

Bridgette and Markus enter into a partnership agreement in which Bridgette is to have a 66%

interest in capital and profits and Markus is to have a 34% interest in capital and profits. Bridgette

contributes the ff:

Cost Fair Value

Land 30,000 29,000

Building 150,000 120,500

Equipment 45,000 35,000

There is a 70,000 mortgage on the building that the partnership agrees to assume. Markus

contributes 90,000 cash to the partnership. Bridgette and Markus agree that Markus's capital

account should equal Markus's 90,000 cash contribution and that goodwill should be recorded.

Required:

1. Computed the Goodwill should be recorded in the books of partnership.