Fontaine and Monroe are forming a partnership. Fontaine invests a building that has a market value of $250,000; the partnership assumes responsibility for a $75,000 note secured by a mortgage on the property. Monroe invests $100,000 in cash and equipment that has a market value of $55,000. For the partnership, the amounts recorded for the building and for Fontaine's Capital account are: Top of Form Multiple Choice Building $175,000; Fontaine, Capital $75,000. Building $250,000; Fontaine, Capital $250,000. Building $175,000; Fontaine, Capital $175,000. Building $250,000; Fontaine, Capital $75,000. Building $250,000; Fontaine, Capital $175,000.
Partnership Accounting
A partnership is a kind of arrangement between two or more people whereby they agree to manage the business operations and share its profits and losses in an agreed ratio between them. The agreement that is drafted and signed by the partners of the firm is termed as partnership deed and contains various important clauses agreed between the partners such as profit/loss sharing, interest on capital, remuneration allocation of each partner, drawings, admission of a new partner, etc.
Partner Admission and Withdrawal
A partnership is a kind of arrangement between two or more people whereby they agree to manage the business operations and share its profits and losses in an agreed ratio between them. The agreement that is drafted and signed by the partners of the firm is termed as a partnership deed and contains various important clauses agreed between the partners such as profit/loss sharing, interest on capital, remuneration allocation of each partner, drawings of a partner, etc.
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Fontaine and Monroe are forming a partnership. Fontaine invests a building that has a market value of $250,000; the partnership assumes responsibility for a $75,000 note secured by a mortgage on the property. Monroe invests $100,000 in cash and equipment that has a market value of $55,000. For the partnership, the amounts recorded for the building and for Fontaine's Capital account are:
Top of Form
Multiple Choice
Building $175,000; Fontaine, Capital $75,000.
Building $250,000; Fontaine, Capital $250,000.
Building $175,000; Fontaine, Capital $175,000.
Building $250,000; Fontaine, Capital $75,000.
Building $250,000; Fontaine, Capital $175,000.
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