Mary Cox entered into a partnership and transferred assets and liabilities from her prior business over to the partnership comprised of the following: $$\begin{array} { | l | l | r | }
\hline \text { Cash } & & \$ 10,000 \
\hline \text { Notes Payable } & & \$ 2,000 \
\hline \text { Inventory } & \text { Original cost } & \$ 12,000 \
\hline & \text { Current market value } & \$ 8,000 \
\hline
\end{array}$$ On the partnership books,the assets and liabilities will be recorded at a combined net value of:

Question

Mary Cox entered into a partnership and transferred assets and liabilities from her prior business over to the partnership comprised of the following: $$\begin{array} { | l | l | r | } 
\hline \text { Cash } & & \$ 10,000 \
\hline \text { Notes Payable } & & \$ 2,000 \
\hline \text { Inventory } & \text { Original cost } & \$ 12,000 \
\hline & \text { Current market value } & \$ 8,000 \
\hline
\end{array}$$ On the partnership books,the assets and liabilities will be recorded at a combined net value of:

Quizplus · Accepted Answer

The combined net value of the assets and liabilities transferred to the partnership is calculated by adding the cash and inventory at current market value, then subtracting the notes payable: $10,000 (cash) + $8,000 (inventory at current market value) - $2,000 (notes payable) = $16,000.

Mary Cox Entered into a Partnership and Transferred Assets and Liabilities