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April and May formed a partnership on January 1, 2011. April contributed $180,000 cash and equipment with a market value of $80,000 with a loan note payable of $40,000. May's investment consisted of $60,000 in cash, $60,000; inventory, $40,000; all at market values. The partnership made a net income of $80,000 for 2011.
Required: Prepare the journal entry to record the formation of the partnership on January 1, 2011.
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Prepaid rent at 1/1/10 was $20,000. During 2010 rent payments of $123,000 were made and charged to "rent expense." The 2010 income statement shows as a general expense the item "rent expense" in the amount of $122,000.
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Ten years ago, Oreo Corporation purchased all of the stock of MilkDud Corporation for $800,000. In the current year, MilkDud Corporation is liquidated, and all of its assets (basis of $1,900,000; fair market value of $2.5 million) are distributed ..
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