Badger and Fox Are Forming a Partnership

question 119

Multiple Choice

Badger and Fox are forming a partnership. Badger invests a building that has a market value of $350,000; the partnership assumes responsibility for a $125,000 note secured by a mortgage on the property. Fox invests $100,000 in cash and equipment that has a market value of $75,000. For the partnership, the amounts recorded for total assets and for total capital account are:

• A) Total assets $525,000; total capital $400,000.
• B) Total assets $400,000; total capital $400,000.
• C) Total assets $650,000; total capital $650,000.
• D) Total assets $400,000; total capital $525,000.
• E) Total assets $525,000; total capital $525,000.

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Definitions:

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