Brian and sandy are forming a partnership. brian will invest a truck with a book value of $10,000 and a fair value of $14,000. sandy will invest a building with a book value of $30,000 and a fair value of $42,000 with a mortgage of $15,000. what amount should be recorded in sandy's capital account? $27,000 $30,000 $42,000 $14,000

Question

Business

Sage Jarvis

14 September, 05:28

Brian and sandy are forming a partnership. brian will invest a truck with a book value of $10,000 and a fair value of $14,000. sandy will invest a building with a book value of $30,000 and a fair value of $42,000 with a mortgage of $15,000. what amount should be recorded in sandy's capital account? $27,000 $30,000 $42,000 $14,000

+1

Answers (1)

Know the Answer?

Mauricio Andrews · Answer 1

The amount that should be recorded in Sandy's capital account is $42,000.

Accounting regulations require us to record assets according to the Fair value (in this case, the Building's fair value is $42,000).

This requirement is placed so the portfolio reflected the Asset's true economic value after considering the situation in the market. (if the situation in the market changed, the accountant could creat adjustment in the Asset's value)