Austin contributes his computer equipment to the landscaping partnership he starts with Bentley.At what amount should the computer equipment be credited to Austin's partnership capital?
A)The tax basis
B)The fair value at the date of contribution
C)Austin's original cost
D)At the amount that Bentley contributes,with the assumption that they both contribute equally to the partnership

Question

Quizplus · Accepted Answer

When contributing assets to a partnership, the generally accepted accounting principles require that the asset be valued at fair value at the date of contribution. This means that the computer equipment should be credited to Austin's partnership capital at the fair value it would have fetched on the market.

Austin Contributes His Computer Equipment to the Landscaping Partnership He