Answer to Question #175470 in Accounting for marilynmanozo

Question

Solar and Wheein enter into an agreement and formed ANGEL LINE partnership in which Solar is to have a 65% interest in capital and profit. Solar invested the following:

Land        P 600,000          ?

Building      4,000,000        fair value of which is 65% of its cost

Equipment    1,500,000        fair value of which is 70% of its cost

There is a P650,000 mortgage on the building with the partners agree to assume. Wheein contributes cash of P2,100,000 and the partners agreed that this should be his capital credit.

Question: How much should be the total agreed equity?

Answer 1

$600 000+0.65\times4 000 000+0.7\times1 500 000+650 000+2 100 000=7 000 000$