Casper and Dold decide to form a partnership. Casper contributes $500,000 in cas

Question

Casper and Dold decide to form a partnership. Casper contributes $500,000 in cash. Dold contributes buildings and equipment with a fair market value of $800,000, subject to a mortgage of $100,000, which the partnership assumes. Assume the partners specify an agreed-upon percentage in the initial partner capital, as follows: 50% to Casper, and 50% to Dold. If the bonus approach to partnership formation is used, Dold's initial capital balance will be: (Points : 1) $600,000 $625,000 $700,000 $650,000

Explanation / Answer

$ 600000, because initial capital will be 1:1 to Casper and Dold

Note: -   1:1 initial partners capital   

casper contributed cash = $500000

Dold contributed assets with mortgage ($800000-100000) = $700000

Total capital contributed = $1200000

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