Chen and Wright Are Forming a Partnership

question 25

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 market value of $90,000. Also, the partnership will assume responsibility for a $30,000 note secured by a mortgage on that building. Wright will invest $50,000 cash. For the partnership, the amounts to be recorded for the building and for Chen's Capital account are:

• A) Building, $90,000 and Chen, Capital, $90,000.
• B) Building, $60,000 and Chen, Capital, $60,000.
• C) Building, $60,000 and Chen, Capital, $50,000.
• D) Building, $90,000 and Chen, Capital, $60,000.
• E) Building, $60,000 and Chen, Capital, $90,000.

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Definitions:

Transportation Option

Different modes or methods of moving goods or people from one location to another, including road, rail, air, and sea transport.

Vidalia Onions

A specific variety of sweet onion grown in Georgia, known for its mild flavor, recognized by its geographical indication.

Total Annual Cost

The sum of all expenses incurred by a business or operation over the course of a year.

Current System

The existing set of procedures, processes, technologies, and methods that are in use within an organization or system.