Question

Rodriguez and Ying start a partnership on July​ 1, 2019. Rodriguez contributes $ 3 comma 600 ​cash, furniture with a current market value of $ 48 comma 000​, and computer equipment. The computer equipment originally cost $ 48 comma 000 in 2017 with recorded accumulated depreciation of $ 27 comma 000. The current market value of the computer equipment is $ 15 comma 000. At what value should the computer equipment be recorded in the accounting records of the​ partnership?

Answer 1

Answer:

$15,000

Explanation:

The value that the computer equipment should be recorded in the accounting records of the​ partnership is the fair value

When calculating the value of a partner's share in a partnership, we use the Asset Approach .

The approach calculates net asset value by subtracting the fair market value of the business's liabilities from the fair market value of its assets.

Hence in the scenario, the applicable value for the computer equipment will be the fair value of $15,000