Question

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:

Answer 1

Total assets = $405,000

Total capital = $330,000

Step-by-step explanation:

Capital = Assets - Liabilities

= $250,000 - 75,000

= $175,000

Therefore, the capital is $175,000

Particulars Assets Liabilities Capital

Building 250,000 75,000 175,000

Cash 100,000 - 100,000

Equipment 55,000 - 55,000

Total 405,000 75,000 330,000