Note: This Is a Kaplan CPA Review Question

question 14

Multiple Choice

Note: This is a Kaplan CPA Review Question
The condensed balance sheet of Adams & Gray, a partnership, at December 31, 20X1, follows:
On December 31, 20X1, the fair values of the assets and liabilities were appraised at $240,000 and $20,000, respectively, by an independent appraiser. On January 2, 20X2, the partnership was incorporated and 1,000 shares of $5 par value common stock were issued. Immediately after the incorporation, what amount should the new corporation report as additional paid-in capital?

• A) $275,000
• B) $215,000
• C) $260,000
• D) $0

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Definitions:

Size of the Effect

The magnitude of the difference or relationship between variables, often used to understand the practical significance of research findings.

Partial Correlation

A numerical index that reflects the relationship between two variables with the removal of the influence of a third variable (called a mediating or confounding variable).

Absolute Value

A numerical value without regard to its sign, often represented as the distance of a number from zero on the real number line.

One-tailed

A one-tailed test in statistics is a hypothesis test where the region of rejection is on only one side of the sampling distribution, focusing on a direction of interest.