Asked by Adeyemi Adeyolanu on Jul 17, 2024
Verified
Bernstein is brought into the partnership. His capital is equal to his net assets that he brings to the partnership. He brings assets of $175,000 and liabilities of $32,000. His capital balance will be:
A) $32,000.
B) $175,000.
C) $207,000.
D) $143,000.
Capital Balance
The amount of owner's equity or shareholder's equity in a business, representing the owner's investment.
Net Assets
The total assets minus total liabilities of an entity, representing the owners' equity.
- Familiarize yourself with the economic impacts of adding new partners to a partnership, including the significance of capital contributions and the valuation of incoming assets and financial obligations.
Verified Answer
AJ
ABDULRAHMAN JAMLIJul 18, 2024
Final Answer :
D
Explanation :
Bernstein's capital balance is calculated by subtracting his liabilities from his assets: $175,000 - $32,000 = $143,000.
Learning Objectives
- Familiarize yourself with the economic impacts of adding new partners to a partnership, including the significance of capital contributions and the valuation of incoming assets and financial obligations.