Question

Sandra and Kelsey are forming a partnership. Sandra will invest a piece of equipment with a book value of $7,000 and a fair market value of $13,900. Kelsey will invest a building with a book value of $35,400 and a fair market value of $63,200. What amount will be recorded to Kelsey's capital account?

Answer 1

Answer:

$63,200

Explanation:

The amount which will be recorded to Kelsey's capital account would be $63,200. As the partner's capital accounts record the fair market value of the assets, not the book values of the assets.  So, only fair market value would be considered

All other information about the Sandra partner which is given is not relevant for the computation part. Hence, ignored it.