Provide the entry to record the additional investment

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Reference no: EM132789860

Sunny and Gloomy contributed the following in the formation of a partnership business:

Sunny

Cash 180,000

Accounts Receivale 100,000

Inventory 160,000

Total 440,000

Groomy

Land (at historical cost) 340,000

Total: 340,000

Additional information:

  1. Only 60% of the accounts receivable is recoverable.
  2. The net realizable value of the inventory is 120,000. Sunny acquired the inventory on account; the partnership will assume the unpaid balance of 60,000.
  3. The land has fair value of 600,000

Sunny and Gloomy agreed to share in profits and losses based on a 30:70 ratio. A partner with deficient contribution shall provide additional cash in order for his capital balance to reflect his profit and losses sharing ratio.

Requirement:

Question 1: Provide the entry to record the additional investment of the partner with deficient contribution.

Reference no: EM132789860

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