Asked by Kaylea Peterson on May 11, 2024
Verified
What amount will be recorded to Kelsey's capital account?
A) $14,000
B) $24,000
C) $40,000
D) $44,000
Capital Account
An account on the balance sheet representing the owners' or shareholders' equity, including funds contributed by investors and retained earnings.
- Learn the approach to calculate the capital account balances in partnerships.
Verified Answer
RG
Regina GivensMay 16, 2024
Final Answer :
D
Explanation :
The total amount of the assets being brought in is $60,000. Out of this, $4,000 is being used to pay off liabilities, leaving $56,000 in assets. Kelsey's share of this is 80%, or $44,800. This will be recorded in her capital account.
Learning Objectives
- Learn the approach to calculate the capital account balances in partnerships.
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