Identify the amount would be recorded for the building and Partner S’ capital account.
Answer to Problem 1MCQ
e. Building, $250,000; Stokely Capital, $200,000.
Explanation of Solution
Assets:
These are the resources owned and controlled by business and used to produce benefits for the company. Assets are classified on the balance sheet as current assets, non-current assets, property, plant, and equipment, and intangible assets.
Capital:
The term capital refers to any financial resources owned by the business to be used for its growth and expansion in the near future. A company’s capital includes investments, stocks, and other assets that are able to generate revenue in the near future.
Option (e): Building, $250,000; Stokely Capital, $200,000 is the correct answer.
- The amount invested by Partner S in the building is $250,000.
- Calculate the amount of S’ capital:
Thus, the amount of building is $250,000 and S’s capital is $200,000.
As per the above explanation, option (a), (b), (c) and (d) are incorrect answer. Hence, option (e) is the correct answer.
Therefore, option (e) Building, $250,000; Stokely Capital, $200,000 is the correct answer.
Want to see more full solutions like this?
Chapter 12 Solutions
Principles of Financial Accounting.
- AccountingAccountingISBN:9781337272094Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.Publisher:Cengage Learning,Accounting Information SystemsAccountingISBN:9781337619202Author:Hall, James A.Publisher:Cengage Learning,
- Horngren's Cost Accounting: A Managerial Emphasis...AccountingISBN:9780134475585Author:Srikant M. Datar, Madhav V. RajanPublisher:PEARSONIntermediate AccountingAccountingISBN:9781259722660Author:J. David Spiceland, Mark W. Nelson, Wayne M ThomasPublisher:McGraw-Hill EducationFinancial and Managerial AccountingAccountingISBN:9781259726705Author:John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting PrinciplesPublisher:McGraw-Hill Education