Harvey and Quick Have Decided to Form a Partnership *Will Be Assumed by the Partnership
Based on This Information

Harvey and Quick have decided to form a partnership. Harvey 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 Harvey is available: $\begin{array}{ll}\text { Historical cost of the asset } & \$ 76,000 \\\text { Accumulated depreciation on the asset } & \$ 40,000 \\\text { Note payable secured by the asset* } & \$ 18,000 \\\text { Agreed-upon market value of the asset } & \$ 45,000\end{array}$
*will be assumed by the partnership
Based on this information, Harvey's beginning equity balance in the partnership will be:

A) $36,000
B) $27,000
C) $45,000
D) $76,000
E) $18,000

Correct Answer:

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