Partnership

Formation
Activity 1-1 No.1
Cash 80,000
Building 400,000
Mortgage Payable 120,000
Jones Capital 360,000

To record initial investment of Jones at their fair value

Activity 1-1 No.1
Cash 40,000
Inventory 280,000
Accounts Payable 60,000
Smith Capital 260,000

To record initial investment of Smith at their fair value

Activity 1-1 No.1
LL MM

641,976 728,352
(27,500) (45,300)
614,476 683,052
Activity 1-1 No.1
LL MM

1,020,916 1,317,002
(20,000) (35,000)
(5,500) (6,700)
(2,000) (3,600)
993,416 1,271,702

TOTAL ASSETS 2,265,118

 Pedro Jose
(FMV) (FMV)
Cash 70,000
Inventory (cost 10,000) 20,000
Equipment (cost 50,000) 30,000

TOTAL 70,000 50,000

Cash 70,000
Pedro Capital 70,000
To record initial investment of PEDRO

Inventory 20,000
Equipment 30,000
Jose Capital 50,000
To record initial investment of JOSE
BONUS METHOD

Pedro Capital 10,000

Jose Capital 10,000

To accomplish equal capital interest of 60,000

GOODWILL METHOD

Goodwill 20,000
Jose Capital 20,000

To accomplish equal capital interest of 70,000 and to record goodwill of 20,000

Sole Proprietor and Another Individual
a. Sole Proprietor Book is retained
b. New Book

Two Proprietors
a. One Sole Proprietor Book is retained
b. New Book