Jeff Layton, sole proprietor of a hardware business, decides to form a partnership with Nicholas Fell. Jeff’s accounts are as follows: Book Value Market Value Cash $ 30,000 $ 30,000 Accounts Receivable (net) 55,000 45,000 Inventory 112,000 135,000 Land 40,000 100,000 Building (net) 500,000 540,000 Accounts Payable 25,000 25,000 Mortgage Payable 125,000 125,000 Nicholas agrees to contribute $120,000 for a 20% interest. Journalize the entries to record (a) Jeff’s investment and (b) Nicholas’ investment.

Jeff Layton, sole proprietor of a hardware business, decides to form a partnership with Nicholas Fell. Jeff’s accounts are as follows: Book Value Market Value Cash $ 30,000 $ 30,000 Accounts Receivable (net) 55,000 45,000 Inventory 112,000 135,000 Land 40,000 100,000 Building (net) 500,000 540,000 Accounts Payable 25,000 25,000 Mortgage Payable 125,000 125,000 Nicholas agrees to contribute $120,000 for a 20% interest. Journalize the entries to record (a) Jeff’s investment and (b) Nicholas’ investment.

CONCEPTS IN FED.TAX.,2020-W/ACCESS

20th Edition

ISBN:9780357110362

Author:Murphy

Publisher:Murphy

Chapter13: Choice Of Business Entity—general Tax And Nontax Factors/formation

Section: Chapter Questions

Problem 43P

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