ueBUNTING PRINCIPLES (AC 1101/1201/11 Assignment t Gradebook ORION Downloadable

ID: 2564813 • Letter: U

Question

ueBUNTING PRINCIPLES (AC 1101/1201/11 Assignment t Gradebook ORION Downloadable eTextbook RUCTOR | | FULL SCREEN : PRINTER VERSION BACK Question 5 Newland and Palermo form a partnership. Newland contributes land with a book value of $50,000 and a fair value of $60,000. Newland also contributes equipment with a book value of $52,000 and a fair value of $57,000. The partnership assumes a $20,000 mortgage on the land. What should be the balance in Newland's capital account upon formation of the partnership? Newland Capital Account SAVE FOR LATER Question Attempts: o of 1 used 7.20 PM DON'T FORGET TO END YOUR SESSION

Explanation / Answer

Computation of Balance in Newland Capital Account

Particulars

Amount ($)

Fair value of the Land

60000

Add: Fair value of the Equipment

57000

Less: Value of Mortgage on the Loan

-20000

Balance in Newland Capital Account

97000

Fair value of the assets should be considered when any asset are introduced in a partnership. Therefore, Calculations were made accordingly