Forman and Berry Are Forming a Partnership

question 17

Multiple Choice

Forman and Berry are forming a partnership. Forman will invest a building that currently is being used by another business owned by Forman. The building has a market value of $80,000. Also, the partnership will assume responsibility for a $20,000 note secured by a mortgage on that building. Berry will invest $50,000 cash. For the partnership, the amounts to be recorded for the building and for Forman's Capital account are:

• A) Building, $80,000 and Forman, Capital, $60,000.
• B) Building, $60,000 and Forman, Capital, $60,000.
• C) Building, $60,000 and Forman, Capital, $50,000.
• D) Building, $60,000 and Forman, Capital, $80,000.
• E) Building, $80,000 and Forman, Capital, $80,000.

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Definitions:

Blood Grouping

The classification of human blood based on the presence or absence of antibodies and inherited antigenic substances on the surface of red blood cells.

Fibrinogen

A blood plasma protein that's converted into fibrin in the blood clotting process.

Fibrin

A fibrous, non-globular protein involved in the clotting of blood.

Coagulation

Coagulation is the process of blood clotting, which prevents excessive bleeding when vessels are damaged.