Question
1.The XYZ partnership has inventory (book value of $200,000 and fair value of $220,000) and fixed assets (book value of $800,000 and fair value of
1.The XYZ partnership has inventory (book value of $200,000 and fair value of $220,000) and fixed assets (book value of $800,000 and fair value of $880,000). It has no other assets.The partnership also has liabilities with both a book value and fair value of $300,000. Partnership capital is recorded as $700,000. The three partners are currently incorporating this business and plan to issue 10,000 shares of $10 par value common stock to each individual. In setting up the opening account balances for the new corporation, what should be reported as additional paid-in capital?
$500,000
$100,000
Zero
$400,000
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