Marty Stubbs invests land in a partnership with Lee Dx. Stubbs purchased the land in 2007 for $2000,000. A real estate appraiser now values the land at $500, 000. Stubbs wants $ 400, 000 capital in the new partnership, but Dix objects. Dix believes that Stubbs' capital investment should be measred by the book value of his lad. Dix and Stubbs seek your advice. Which value of the land is appropriate for measuring Stubbs' capital book value or current marekt value? State the reason for your answer. Give the partnership's journal entry to record Stubbs' investment in the business.
Joe Brown and Chris White are forming a partnership to develop a theme park near Panama City, Florida. Brown invests cash of $1 million and land valued at $10 million. When Brown purchased the land in 2007, its cost was $8 million. The partnership will assume Brown's 3 million note payable on the land. White invests cash o $3 million and equipment worth $7 million.
Requirements
1. Journalize the partnership's receipt of assets and liabilities from Brown and from White.
2. Compute the partnership's total assets, total liabilities, and total owners' equity immediately after orgnizing.