Question

Dalworth and Minor have decided to form a partnership. Minor is going to contribute a depreciable asset to the partnership as her equity contribution to the partnership. The following information regarding the asset to be contributed by Minor is available:
Historical cost of the asset $276,000
Accumulated depreciation on the asset $140,000
Note payable secured by the asset and assumed by the partnership $118,000
Agreed-upon market value of the asset $245,000

Based on this information, Minor's beginning equity balance in the partnership will be:_________

a. $276,000
b. $158,000
c. $136,000
d .$127,000
e. $18,00

Answer 1

Answer:

d .$127,000

Explanation:

The computation of the beginning equity balance is shown below:

= Market value of the assets i.e agreed upon - Note payable secured by the asset

= $245,000 - $118,000

= $127,000

By deducting the note payable from the market value of the asset so that the beginning equity balance could come  

All other information mentioned in the question is not relevant. Hence, ignored it