Question: 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 data regarding the asset to be contributed by Trump is available:
Historical cost of the asset USD 76,000
Accumulated depreciation on the asset USD 40,000
Note payable secured by the asset *USD 18, 000
Agreed upon market value of the asset USD 45, 000
*will be assumed by the partnership
Based on this data, Trump’s beginning equity balance in the partnership will be:
[A] 18,000
[B] 27,000
[C] 45,000
[D] $76,000
[E] 36,000