Calculate the capital balance of each partner

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Reference no: EM13151401

Question:  Tupper and Tolin have decided to form a partnership to provide environmental testing services to industry. The individuals will share profits equally and have conveyed the following assets and liabilities to the partnership:

                                                     Tupper                                   Tolin           

 

Fair Value

Book Value

Fair Value

Book Value

Cash

$20,000

$20,000

mce_markernbsp;   -    

mce_markernbsp;   -    

Equipment  basis

12,000

10,000

34,000

40,000

Vehicles  basis

 

 

6,000

6,000

Notes payable*

8,000

6,000

20,000

22,000

 

 

 

 

 

* Associated with equipment
Required:

1)  Calculate the capital balance of each partner in the partnership subsequent to the contributions.
2)  Prepare the journal entry necessary to record the partners' contributions. 

 

 

Reference no: EM13151401

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