Trump
and Hawthorne have decided to form a partnership. Trump is going to
contribute a depreciable asset to the partnership as his equity
contribution to the partnership. The following information regarding the
asset to be contributed by Trump is available:
| Historical cost of the asset | $82,000 |
| Accumulated depreciation on the asset | $43,000 |
| Note payable secured by the asset* | $25,000 |
| Agreed-upon market value of the asset | $48,000 |
*will be assumed by the partnership
|
| |
| Based on this information, Trump's beginning equity balance in the partnership will be: |
$48,000 market value of the asset – $25,000 of debt (note payable) assumed by the partnership = $23,000.
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