CHAPTER 15, 6

PLEASE READ: This is one question that has three parts (a--c), please answer the FULL question, please TYPE your answer, please LABEL your answer. Thank you in advance.

The partnership of Jordan and O'Neal began business on January 1, 20X7. Each partner contributed the following assets (the noncash assets are stated at their fair values on January 1, 20X7): Jordan O'Neal 61,000 50,300 80,500 Cash Inventories Land Equipment -0-131,100 100,200 The land was subject to a $51,700 mortgage, which the partnership assumed on January 1, 20X7. The equipment was subject to an installment note payable that had an unpaid principal amount of $21,900 on January 1, 20X7. The partnership also assumed this note payable. Jordan and O'Neal agreed to share partnership income and losses in the following manner: Jordan O'Neal 3% Interest on beginning capital balances Salaries Remainder 3% $13,100 $13,100 60% 40%