Question

Fontaine and Monroe are forming a partnership. Fontaine invests a building that has a market value of $364,000, the partnership assumes responsibility for a $132.000 note secured by a mortgage on the property, Monroe invests $107.000 in cash and equipment that has a market value of $82.000. For the partnership, the amounts recorded for total assets and for total capital account are: Multiple Choice O Total assets $553,000; total capital $553,000 O O Total assets $421000, total capital $421,000. O Total assets $421000, total capital $553,000 O Total assets $553.000, total capital $421000 o Total assets $685,000 total capital 5685.000

Answer 1

Answer
The correct opion is D : total assets $ 553,000 : Total capital $421,000
Explanation
Calculate total assets :
Building	$               364,000
Cash	$               107,000
Equipment	$                 82,000
Total Assets	$               553,000
Calculate Total capital account :
Fontaine's capital (364,000-132000)	$               232,000
Monroe's capital (107000+82000)	$               189,000
Total capital account	$               421,000