Fontaine and Monroe Are Forming a Partnership

question 137

Multiple Choice

Fontaine and Monroe are forming a partnership. Fontaine invests a building that has a market value of $250,000; the partnership assumes responsibility for a $75,000 note secured by a mortgage on the property. Monroe invests $100,000 in cash and equipment that has a market value of $55,000.
-For the partnership, the amounts recorded for total assets and for total capital account are:

• A) Total assets $405,000; total capital $305,000.
• B) Total assets $305,000; total capital $230,000.
• C) Total assets $350,000; total capital $350,000.
• D) Total assets $350,000; total capital $275,000.
• E) Total assets $405,000; total capital $330,000.

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Definitions:

Preventive Maintenance

Regular and planned maintenance of equipment and facilities to prevent unexpected failures and downtime.

Useful Life

The estimated duration a fixed asset is expected to be economically usable, with normal wear and tear, for its intended purpose.

Differentiation Value

The unique value that a product or service offers to distinguish it from its competitors, enhancing its appeal to consumers.

Return on Investment

A performance measure used to evaluate the efficiency or profitability of an investment, calculated as the net profit from the investment divided by its cost.