When Nada and Rand decided to incorporate their partnership,
the trial balance was as follows:
Debit
Credit
Cash
$60,000
Accounts Receivable (net)
35,000
Inventory
65,000
Equipment
130,000
Accounts Payable
$60,000
Nada, Capital
150,000
Rand, Capital
80,000
Total
$290,000
$290,000
The partnership's books will be closed, and new books will be
used for N & R Corporation.
The following additional information is available:
1. The estimated fair values of the assets & liabilities
are as follows:
Accounts Receivable
$38,000
Inventory
70,000
Equipment
125,000
Accounts Payable
58,000
2. All assets and liabilities are transferred to the
corporation.
3. The common stock is $7 par. Nada and Rand receive a total
of 30,000 shares.
4. Nada and Rand share profits and losses in the ratio
7:3.
Partners’ capital account balances after the revaluation of
net assets will be as follows:
Select one:
a. Nada $153,500, Rand $81,500.
b. Nada $145,100, Rand $77,900.
c. Nada $154,900, Rand $82,100.
d. Nada $146,500, Rand $78,500.