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What amount of cash should Berg contribute

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Q1. Ice and Berg form a new partnership. Ice invests P300,000 in cash for his 60 percent interest in capital and profits of the business. Berg contributes land that has an original cost of P40,000 and a fair market value of P70,000, and a building that has a tax basis of P50,000 and a fair market value of P90,000,. The building is subject to a P40,000 mortgage that the partnership will assume. What amount of cash should Berg contribute?

a. P40,000

b. P80,000

c. P110,000

d. P150,000

Q2. On May 1, 2020, Tom and Jerry formed a partnership and agreed to share profits and losses in the ratio of 3:7 respectively. Tom contributed a computer that cost him P50,000. Jerry contributed P200,090 cash. The computer was sold for P55,000 on May 1, 2020, immediately after the formation of the partnership. If the partnership is liquidated immediately after formation, what amount of inequity would result from recording the computer at P50,000?

a. P1,500

b. P3,500

c. P5.000

Reference no: EM132736976

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