On January 2, Smith purchased the net assets of Jimmy's Cleaning, a sole proprietorship, for $350,000 and
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On January 2, Smith purchased the net assets of Jimmy's Cleaning, a sole proprietorship, for $350,000 and commenced operations of Spiffy Cleaning, a sole proprietorship. The assets had a carrying amount of $375,000 and a market value of $360,000. In Spiffy's cash-basis financial statements for the year ended December 31, Spiffy reported revenues in excess of expenses of $60,000. Smith's distributions during the year were $20,000. In Spiffy's financial statements, what amount should be reported as Capital -- Smith?
A. $390,000
B. $400,000
C. $415,000
D. $410,000
Related Book For
Intermediate Accounting
ISBN: 978-0176509736
10th Canadian Edition, Volume 1
Authors: Donald Kieso, Jerry Weygandt, Terry Warfield, Nicola Young,
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