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How much cash should Athena invest

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Reference no: EM132886071

Question - Eve contributed the following items coming from her sole-proprietor-owned music store:

Athena and Eve agree to form a partnership on May 1.

Merchandise Inventory - cost of $120,000, current fair value of $100,000

Equipment - cost of $500,000; book value of $350,000, current value of $300,000

Note payable in purchasing the equipment of $150,000 will be assumed by the partnership

Athena contributed Furniture and Fixtures which was purchased by Athena two (2) years ago for $500,000 but which current market value is only 50% of the cost.

Required -

1. If the partners agree that equity will be 40% for Eve and 60% for Athena, how much cash should Athena invest?

2. Give two entries in the partnership books to record the investments of Eve and Clara.

Reference no: EM132886071

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