Land,a Building and Equipment Are Acquired for a Lump Sum

question 17

Multiple Choice

Land,a building and equipment are acquired for a lump sum of $800,000.The market values of the land,building and equipment are $400,000,$900,000 and $300,000,respectively.What is the cost assigned to the equipment? (Do not round any intermediary calculations,and round your final answer to the nearest dollar. )

• A)$0
• B)$150,000
• C)$300,000
• D)$800,000

Understand the concept of mutual agency within a partnership.

Grasp the principle of joint liability in partnerships.

Master the income and loss distribution and its impact on partners' capital accounts.

Calculate partnership return on equity and individual partner return on equity ratios.

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Definitions:

Goodwill

An immaterial asset generated when a company is purchased at a price exceeding the fair market value of its clear net assets.

Equity Method

A method of accounting in which an investor recognizes its share of the profits and losses of an investee company in its own profit and loss statement, proportional to the investor's share of equity in the investee.

Diluted Earnings Per Share

A metric that calculates a company’s earnings per share considering all potentially convertible securities.

Preferred Stock

A class of ownership in a corporation that has a higher claim on assets and earnings than common stock and usually receives dividends before common shareholders.