Which true about computation of average capital of partners

Assignment Help Financial Accounting

Reference no: EM132770091

Problem 1: Two individuals who were previously sole proprietors formed a partnership. Property other than cash which is part of the initial investment in the partnership would be recorded for financial accounting purposes at the:

A. proprietors' book values or the fair value of the property at the date of the investment, whichever is higher

B. proprietors' book values or the fair value of the property at the date of the investment, whichever is lower.

C. proprietors' book values of the property at the date of the investment.

D. fair value of the property at the date of the investment

Problem 2: Which is true about the computation of average capital of partners?

A. investments increases the average capital

B. investments decreases the average capital

C. drawings increases the weighted average capital

D. the effect of investments and drawings cannot be ascertained

Reference no: EM132770091

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