Question 26

Use this problem to answer questions 26 to 29. A and B (AB partnership) decide to form a partnership. A already has a business in operation and he transfers the following business items into the partnership.

Cash

$6,000

Inventory

14,000

Equipment

40,000

Accumulated Depreciation

(10,000)

Liabilities

20,000

Also, the following information is available about A's business assets. The inventory has a current market value of 18,000; the equipment has a current value of 38,000; and there are 2,000 of unrecorded liabilities that the partnership assumes.

Mr B contributes 20,000 cash to the partnership.

What is the value of total assets brought by A that will be recorded in the partnership?

$60,000

$62,000

$52,000

$50,000