Chen and Wright Are Forming a Partnership

question 53

Multiple Choice

Chen and Wright are forming a partnership. Chen will invest a building that currently is being used by another business owned by Chen. The building has a fair market value of$65,000. Also, the partnership will assume responsibility for a $15,000 note secured by a mortgage on the building. Wright will invest $20,000 cash. On the books of thepartnership, the amount to be recorded for the building and credit to Chen's capital account are:

• A) $65,000 and $65,000.
• B) $50,000 and $20,000.
• C) $20,000 and $65,000.
• D) $50,000 and $40,000.
• E) $65,000 and $50,000.

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Definitions:

Matrix Structure

An organizational layout that combines two or more types of structures, typically functional and product-based, to leverage benefits of both.

Cross-functional Teams

Groups composed of members from different departments or areas of expertise, working together towards a common objective.

Functional Expertise

Specialized knowledge and skills in a specific area of operation within an organization.

Divisional Focus

A strategic approach where an organization is structured into semi-autonomous units, each concentrating on a specific aspect of the business.