Question

Maxwell and Smart are forming a partnership. Maxwell is investing a building that has a market value of $84,000. However, the building carries a $52,000 mortgage that will be assumed by the partnership. Smart is investing $28,000 cash. The balance of Maxwell's Capital account will be:

Answer 1

Answer:

$32,000

Explanation:

Calculation for the balance of Maxwell's Capital account

Using this formula

Assets =Liabilities-Owner's Equity

Where,

Liabilities =$84,000

Owner's Equity=$52,000

Let plug in the formula

Assets =$32,000

Therefore the balance of Maxwell's Capital account will be $32,000