Reference no: EM132769910
Question - Tom and Julie formed a management consulting partnership on January 1, 2016. The fair value of the net assets invested by each partner follows:
Tom Julie
Cash $12,500 $11,300
Accounts receivable 8,400 6,000
Office supplies 1,900 900
Office equipment 27,300 -
Land - 28,300
Accounts payable 2,200 5,500
Mortgage payable - 19,600
During the year, Tom withdrew $13,900 and Julie withdrew $10,900 in anticipation of operating profits. Net profit for 2016 was $51,300, which is to be allocated based on the original net capital investment.
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