On November 1,2008,Miller and Reising Formed a Partnership

question 112

Multiple Choice

On November 1,2008,Miller and Reising formed a partnership.Miller contributed land valued at $90,000 and a building valued at $115,000.Reising contributed $90,000 cash.In addition,the partnership assumed responsibility for Miller's $85,000 mortgage payable associated with the land and building.What are the balances of the partners' capital accounts after these transactions have been recorded?

• A)Miller: $120,000; Reising: $90,000
• B)Miller: $205,000; Reising: $90,000
• C)Miller: $105,000; Reising: $105,000
• D)Miller: $90,000; Reising: $120,000
• E)Miller: $90,000; Reising: $205,000

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Definitions:

Legal Position

The stance or argument taken on a legal issue, often based on laws, precedents, and principles.

Partnership

A legal form of business operation between two or more individuals who share management and profits.

Partner

An individual who shares ownership of a business or an endeavor with one or more persons, often sharing in profits and responsibilities.

Profitability

The degree to which a business or activity yields financial profit or gain, often measured as a ratio of net income to revenue.