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 total assets and for total capital account are:
A)Total assets $405,000;total capital $330,000.
B)Total assets $350,000;total capital $350,000.
C)Total assets $350,000;total capital $275,000.
D)Total assets $305,000;total capital $230,000.
E)Total assets $405,000;total capital $305,000.

Question

Quizplus · Accepted Answer

Fontaine's investment is $250,000 - $75,000 = $175,000. Total assets are $175,000 + $100,000 + $55,000 = $405,000. Total capital is $175,000 + $100,000 = $330,000.

Fontaine and Monroe Are Forming a Partnership