Tom & Dick go into business together as partnership, selling computer software through the internet. On January 1, they each put in $6,000 as capital, and this goes into the Tom&Dick account at their local bank. They buy computer equipment for $10,000 (paid by cheque) and set up for business in Dick’s dad’s basement. The cost of the computer equipment will be amortized over the next three years, with a disposal value of $1,000. Dick’s dad has agreed to let them operate out of his basement if they pay him a rent of 10% of their annual profit, or $1,200 per year, whichever is greater. At this point the total asset is: A. $6,000.00 B. $12,000.00 C. $10,800.00 D. $22,000.00 E. There is no possible answer
Tom & Dick go into business together as
| A. |
$6,000.00 |
|
| B. |
$12,000.00 |
|
| C. |
$10,800.00 |
|
| D. |
$22,000.00 |
|
| E. |
There is no possible answer |
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