Calculate the capital balance of each partner

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Reference no: EM131978021

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:


Fair Value

Book Value

Fair Value

Book Value

Cash

$20,000

$20,000

$    -

$    -

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: EM131978021

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