Maxwell and Smart are forming a partnership. Maxwell is investing a building that has a market value of $180,000. However, the b

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3 years ago

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Maxwell and Smart are forming a partnership. Maxwell is investing a building that has a market value of $180,000. However, the b

uilding carries a $56,000 mortgage that will be assumed by the partnership. Smart is investing $120,000 cash. The balance of Maxwell's Capital account will be:

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1 answer:

Margarita [4] · Answer 1 · 2022-03-19T00:16:17+03:00

Answer:

The balance of Maxwell's Capital account will be $124,000

Explanation:

The computation of the Maxwell capital account balance is shown below:

= Market value of the building - mortgage on the building

= $180,000 - $56,000

= $124,000

The cash invested by the smart is not considered in the computation part because the question has asked for the Maxwell, not for smart. So, we ignored it.