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Question
When a new partner is admitted to a partnership, a bonus
a. may be attributable to the existing partners
b. may only result from more cash being given by the new partner than the value of the assets being purchased
c. agreed upon by the partners is recorded as an asset so long as the amount is within the range set by the SEC
d. is not recorded
Use this information to answer the questions that follow.
Sandra and Kelsey are forming a partnership. Sandra will invest a piece of equipment with a book value of $7,500 and a fair market value of $18,000. Kelsey will invest a building with a book value of $40,000 and a fair market value of $44,000.
Answer
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