Establishing a Partnership
Krantz Company and Dull Corporation decided to form a partnership. Krantz agreed to transfer the following assets and accounts payable to K&D Partnership in exchange for 60 percent ownership:
| Cost | Book Value |
Cash | $ 10,000 | $ 10,000 |
Inventory | 30,000 | 30,000 |
Land | 70,000 | 70,000 |
Buildings | 200,000 | 150,000 |
Equipment | 120,000 | 90,000 |
Accounts Payable | 50,000 | 50,000 |
Dull agreed to contribute cash of $200,000 to K&D Partnership.
Required
a. Give thejournal entries that K&D recorded for its receipt of assets and accounts payable from Krantz and Dull.
b. Give thejournal entries that Krantz and Dull recorded for their transfer of assets and accounts payable to K&D Partnership.
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