Mike Derr and Mark Finger form a partnership by combining assets of their separate businesses. The following balance sheet information is provided by Derr from his sole proprietorship.

Cash			$	1,000		Accounts payable	$	4,500
Supplies				3,000		Notes payable		3,100
Equipment	$	11,000				Total liabilities		7,600
Less: Accumulated depreciationEquip.		9,000		2,000
Land				4,000		M. Derr, Capital		2,400
Total assets			$	10,000		Total liabilities and equity	$	10,000

The new partners obtain appraised values and agree to accept the book values for Derrs assets and liabilities except for the following: Equipment is valued at $5,000, and land is worth $8,000.