Harvey and Quick have decided to form a partnership. Harvey is going to contribu

Question

Harvey and Quick have decided to form a partnership. Harvey is going to contribute a depreciable asset to the partnership as his equity contribution to the partnership. The following information regarding the asset to be contributed by Harvey is available: Historical cost of the asset $87,000 Accumulated depreciation on the asset $45,500 Note payable secured by the asset* $30,000 Agreed-upon market value of the asset $50,500 *will be assumed by the partnership Based on this information, Harvey's beginning equity balance in the partnership will be:

Explanation / Answer

Statement showing computations Particulars Amount Agreed-upon market value of the asset                      50,500.00 Note payable secured by the asset                      30,000.00 Harvey's beginning equity balance = Asset - Note Payable = 50,500-30,000                      20,500.00

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