1 answer

Steve owns 62% and Mark owns 38% of a partnership business. They purchase equipment with a...

Question:

Steve owns 62% and Mark owns 38% of a partnership business. They purchase equipment with a suggested value of $9,900. The cur

Steve owns 62% and Mark owns 38% of a partnership business. They purchase equipment with a suggested value of $9,900. The current market value of the equipment at the time of purchase was $9,400. At the time of the balance sheet preparation, depreciation of $230 was recorded. Based on the information provided, which of the following is true of the partnership? O A. The Equipment account will be debited at $9,170 on the date of purchase. OB. The Equipment account will be debited at $9,900 on the date of purchase. O C. The Equipment account will be debited at $9,670 on the date of purchase. OD. The Equipment account will be debited at $9,400 on the date of purchase.

Answers

Answer - (C) - The equipment will be debited at $9670 on the date of purchase.

Because at the time journalising the entry we do not consider the market value and depreciation would be charged from suggested value i.e $9900 and the debit amount will be $9670 ($9900 - $230)

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