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Characteristics of a partnership, account for partner investments
Gina Sanchez and Carlo Torres are forming a partnership, Spanish Leather Goods, to import from Spain. Sanchez is especially artistic and will travel to Spain to buy the merchandise. Torres is a super salesman and has already lined up several department stores to sell the leather goods.
Requirements
1. If Sanchez and Torres do not draft a written profit-sharing agreement, how will profits or losses be shared?
2. Sanchez is contributing $100,000 in cash and accounts payable of $20,000. Torres is contributing a building that cost Torres $75,000. The building's current market value is $90,000. Journalize the investment of the two partners.
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