Reference no: EM132813742
Questions -
Q1. On December 1, 2020, Molina and Cordova agreed to invest equal amounts and share profits equally to form a partnership. Molina invested 780,000 cash and a piece of equipment. Cordova invested some assets which are shown below:
Book Value
Accounts receivable 100,000
Inventory 280,000
Machineries, net 560,000
Intangibles, net 230,000
The assets invested by Cordova are not properly valued. P 8,000 of the accounts receivable are proven uncollectible. Inventories are to be written down to 260,000. Included in the machineries is an obsolete apparatus acquired for 96,000 with an accumulated depreciation balance of 84,000. Part of the intangibles is a patent with a carrying value of 14,000 which was sued upon by a competitor. Cordova unsuccessfully defended the case and the final decision of the court was released on November 29, 2020. What is the fair value of the equipment invested by Molina?
Q2. On December 1, 2020, Magno and Adriano are combining their separate businesses to form a partnership. Cash and non-cash assets to be contributed and the liabilities to be assumed are as follows:
Magno Adriano
Book value Fair value Book value Fair value
Accounts receivable 100,000 105,000 80,000 78,000
Inventory 160,000 180,000 80,000 83,000
PPE 400,000 365,000 345,000 329,000
Accounts payable 60,000 60,000 45,000 45,000
Magno and Adriano are to invest equal amounts of cash such that the contribution of Magno would be 10% more than the investment of Adriano. What is the amount of cash presented on the partnership's Statement of Financial Position on December 1, 2020?