Partners A and B have formed a new partnership. A contributes $50,000 in cash and $20,000 in

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Part I
Partners A and B have formed a new partnership.  A contributes $50,000 in cash and $20,000 in merchandise inventory, but $3000 is still owed to a creditor on account.  B contributes a building that cost $150,000, but has been depreciated for $40,000, land worth $25,000, and accounts receivable with a book value of $60,000.  The building has a mortgage owed on it of $45,000.  The partners agree to accept all liabilities on the assets and that $3000 of Partner B's accounts receivable is worthless and $5000 appears doubtful.  They also agree the building is really worth $250,000 because of the real estate market.
Provide the two journal entries to bring the partners into the partnership.

Part II
Partners E and F have written the following partnership agreement:
Partners will share income based on:
1.  salaries of $40,000 to E and $50,000 to F and
2.  Any balance in a ratio of 1:2

1.  Determine the distribution of income if the net income this year was $130,000.
2.  Determine the distribution of income if the net income for the year was $90,000.
3.  Provide the closing entry for either of the above situations.

Part III
Partners X and Y are the owners of Partnership XY.  X has a capital balance of $60,000 and Y has a capital balance of $80,000.  Partner Z is entering the partnership by purchasing 1/3 of X for $25,000 and 1/4 of Y for $25,000.  Answer the following questions:
1.  Provide the journal entry for the transaction above.
2.  Determine the capital balance in Partner X's account.
3.  How much did Z pay to enter the partnership?
4.  What happened to the total partnership capital of the firm?
5.  What is the name of the method we used in this situation?

Part IV
Partnership ABC has decided to liquidate the partnership.  They have provided you with the following information.
Trial Balance
Cash..................................70,000
Noncash assets...................200,000
Liabilities............................................20,000
A, Capital...........................................100,000
B, Capital...........................................120,000
C, Capital...........................................30,000
The noncash assets of the business were sold for $250,000.  The resulting gain was divided in a ratio of 1:2:2.
1.  Provide a statement of partnership liquidation.
2.  Provide the journal entries to record the sale of assets, the division of the gain, the payment of the liabilities and the division of cash.

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