Tim and Michelle have decided to form a partnership with a 60/40 partnership interest ratio. Tim contributes cash and merchandise inventory with a market value of . While journalizing this transaction .

Complete question:

Tim and Michelle have decided to form a partnership with a 60/40 partnership interest ratio. Tim contributes $7500 cash and merchandise inventory with a market value of $1500. While journalizing this transaction .

A) Tim, Capital will be debited for $9000

B) Tim, Capital will be credited for $9000

C) Tim, Capital will be credited for $6000 and Michelle, Capital will be credited for $4500

D) Tim, Capital will be debited for $6000 and Michelle, Capital will be debited for $4500

Tim, Capital will be credited for $9000

Explanation: Tim's total contribution towards the partnership will be recorded as his capital. Since he has contributed $7,500 worth of cash, and merchandise inventory with a market value of $1,500. The market value of the merchandise inventory and the cash contributed adds up towards his capital contribution. This is $7,500 + $1,500 which sums up to a total of $9,000.

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