Griffin and Rhodes formed a partnership on January 1, 2009. Griffin contributed

Question

Griffin and Rhodes formed a partnership on January 1, 2009. Griffin contributed cash of $120,000 and Rhodes contributed land with a fair value of $160,000. The partnership assumed the mortgage on the land which amounted to $40,000 on January 1. Rhodes originally paid $90,000 for the land. On July 31, 2009, the partnership sold the land for $190,000. Assuming Griffin and Rhodes share profits and losses equally, how much of the gain from sale of land should be credited to Griffin for financial accounting purposes? (Points : 1)    

     X
      Y
      Z
      Both X and Y

When a partnership is liquidated on a piecemeal basis and cash has been distributed properly to all partners as noncash assets have been turned into cash, all future cash distributions should be made:
I. In the profit and loss ratio.
II. According to the balances in the partners' capital accounts. (Points : 1)       I only
      II only
      Both I and II
      Neither I nor II

Explanation / Answer

$150,000 net gain for the partners. Then pay back Rhodes $40,000 for business input differences. Then split the $110,000 between the equal partners for a total of:

$45,000 to Griffin

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