Harvey and Quick have decided to form a partnership.Harvey is going to contribute a depreciable asset to the partnership as his equity contribution to the partnership.The following information regarding the asset to be contributed by Harvey is available:
$$\begin{array} { l l }
\text { Historical cost of the asset } & \$ 76,000 \
\text { Accumulated depreciation on the asset } & \$ 40,000 \
\text { Note payable secured by the asset* } & \$ 18,000 \
\text { Agreed-upon market value of the asset } & \$ 45,000 \\
*\text { will be assumed by the partriership }
\end{array}$$
Based on this information,Harvey's beginning equity balance in the partnership will be:

Question

Harvey and Quick have decided to form a partnership.Harvey is going to contribute a depreciable asset to the partnership as his equity contribution to the partnership.The following information regarding the asset to be contributed by Harvey is available:
$$\begin{array} { l l } 
\text { Historical cost of the asset } & \$ 76,000 \
\text { Accumulated depreciation on the asset } & \$ 40,000 \
\text { Note payable secured by the asset* } & \$ 18,000 \
\text { Agreed-upon market value of the asset } & \$ 45,000 \\
 *\text { will be assumed by the partriership }
\end{array}$$
Based on this information,Harvey's beginning equity balance in the partnership will be:

Quizplus · Accepted Answer

Harvey's equity balance is the market value of the asset ($45,000) minus the note payable assumed by the partnership ($18,000), resulting in $27,000.

Harvey and Quick Have Decided to Form a Partnership Based on This Information,Harvey's Beginning Equity Balance in the Partnership