Mutt and Jeff formed a partnership on April 1 and contributed the following assets:Mutt JeffCash $ 150,000 $ 50,000 Land 310,000 The land was subject to a $30,000 mortgage, which the partnership assumed. Under the partnership agreement, Mutt and Jeff share profit and loss in the ratio of one-third and two-thirds, respectively. Jeff's capital account at April 1 should beA) $360,000. B) $330,000. C) $300,000. D) $340,000.

Question

Lea Cunningham

Business

28 January, 11:32

Mutt and Jeff formed a partnership on April 1 and contributed the following assets:Mutt JeffCash $ 150,000 $ 50,000 Land 310,000 The land was subject to a $30,000 mortgage, which the partnership assumed. Under the partnership agreement, Mutt and Jeff share profit and loss in the ratio of one-third and two-thirds, respectively. Jeff's capital account at April 1 should beA) $360,000. B) $330,000. C) $300,000. D) $340,000.

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Susan Douglas · Answer 1

B) $330,000

Explanation:

Jeff contribute

cash 50,000

land 310,000

with a mortgage of 30,000

Total contribution

assets 360,000

liabilities (30,000)

total 330,000

The entry to record the land will be:

Land 310,000

Mortgage payable 30,000

Jeff Capital Account 280,000

The land is recorded, the parthnership assumes the mortage and the remainder goes into Jeff Capital Account.