Maxwell and Smart are forming a partnership. Maxwell is investing a building that has a market value of $180,000. However, the building carries a $56,000 mortgage that will be assumed by the partnership. Smart is investing $120,000 cash. The balance of Maxwell's Capital account will be:
A) $56,000.
B) $180,000.
C) $60,000.
D) $64,000.
E) $124,000.

Question

Quizplus · Accepted Answer

Maxwell's investment is the building's market value minus the mortgage assumed by the partnership: $180,000 - $56,000 = $124,000.

Maxwell and Smart Are Forming a Partnership