Table 12-1 Hanna Contributes $55,000 Cash, Land That She Bought for $195,000

question 105

Multiple Choice

Table 12-1
Hanna contributes $55,000 cash, land that she bought for $195,000, and a building that cost her $140,000 and has been amortized $70,000, to the newly formed partnership of H & B Company. The current market value of the building is $200,000 and has an outstanding mortgage of $100,000. The current market value of the land is $390,000.
Barbara contributes $50,500 cash, equipment with a current market value of $80,000 with an outstanding note payable of $15,000, and an automobile with a current market value of $30,000. Barbara originally paid $60,000 for the equipment, which has been amortized $20,000. The partners have agreed to share profits and losses equally.
-Referring to Table 12-1,the entry to record the investment by Hanna includes a debit to:

• A) building for $200,000
• B) land for $195,000
• C) building for $140,000
• D) cash for $50,500

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Definitions:

Reciprocal

Involving a mutual exchange or give-and-take relationship between two parties.

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Group Conferences

denote meetings involving multiple participants, typically focusing on educational, social, or professional topics.

Sending Notes

The act of transmitting messages or information, typically in written form, from one person to another through various means including paper, electronic communication, or other channels.