Question

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.

Answer 1

B)$330,000

Step-by-step 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.