Canfield Invests Cash of $20,000 and Inventory with a Cost

question 171

Multiple Choice

Canfield invests cash of $20,000 and inventory with a cost of $60,000 and a current value of $65,000 in the Canfield and Roose Partnership.In addition,Canfield invests land with a cost of $75,000,a current market value of $170,000,and a $70,000 mortgage on the property assumed by the partnership.Roose invests equipment with a cost of $100,000 and accumulated amortization of $40,000.Roose's equipment has a current market value of $100,000.Roose also invests inventory with a current market value of $30,000.
-What is the balance in the capital account of Canfield?

• A) $155,000
• B) $85,000
• C) $185,000
• D) $180,000

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Definitions:

Ambiguous

Something that can be understood in more than one way; lacking clearness or definiteness.

Productivity

In industry, the capability to produce effectively, gauged by how much output is generated per input unit.

Reinforcement

In psychology, a process by which a behavior is strengthened or increased in frequency, often through the application of a reward or the removal of a negative stimulus.

Enforced Commitment

The obligation or dedication imposed by external factors or authorities.