Isis and Kelsey are forming a partnership. Isis will invest a piece of equipment with a book value of $7,500 and a fair market v

Question

3 years ago

12

Isis and Kelsey are forming a partnership. Isis will invest a piece of equipment with a book value of $7,500 and a fair market v

alue of $18,000. Kelsey will invest a building with a book value of $40,000 and a fair market value of $44,000.
Required:
a. What amount will be recorded to Isis's capital account?

Business

2 answers:

asambeis [7] · Answer 1 · 2022-05-15T16:41:41+03:00

Answer:

$18,000

Explanation:

The amount that should be recorded to Isis's capital account is the fair market value of the assets acquired by her, regardless of the book value. Since Isis bought a piece of equipment with a fair market value of $18,000, and that is her only known contribution in the partnership, the amount that should be recorded to Isis's capital account is $18,000.

WITCHER [35] · Answer 2 · 2022-05-15T18:23:02+03:00

WITCHER [35]3 years ago

6 0

Answer:

$18000 will be recorded to Isis's capital account.

Explanation:

Although Isis's book value is $7500, but Isis's contribution will be considered at fair market value which is $18000.