Question

Betty invests equipment with a cost of $100,000 and accumulated depreciation of $30,000 in a new partnership. The current value of the equipment is $105,000. The replacement value of the equipment is $135,000.

At what amount would the equipment be recorded in Betty's capital account?
$70,000
$105,000
$135,000
$100,000

Answer 1

correct option is B) $105,000

Step-by-step explanation:

given data

equipment cost = $100,000

accumulated depreciation = $30,000

current value of equipment = $105,000

replacement value of equipment = $135,000

here we know that according to IRS capital assets will be value value at current fair value and here current fair value of asset is given $105000

and it is standard value

so here amount of equipment recorded in Betty's capital account is $105,000

correct option is B) $105,000