How much should be credited to Ben capital

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Question - Ben and Berty agree that the net realizable value of the receivables is $180,000 and that the fair value of the equipment is $300,000. They further agree that the newly formed partnership will assume Ben's liability as shown in his statement of financial position. How much should be credited to Ben's capital?

Ben and Berty contributed $100,000 each into their partnership and have profit and loss agreement with the following provisions: salaries of $20,000 and $25,000 for Ben and Berty, respectively; and interest of 25% on average capital balances of $40,000 and $50,000 for Ben and Berty, respectively. One-fourth of any remaining profits are allocated to Ben and the balance to Berty. If the partnership had a net income of $58,000, how much should be allocated to Ben?

Reference no: EM132935057

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