Joe and Susan have formed a partnership, Joe contributed accounts receivable with a gross value of $25,000 and a net realizable value of $20,000 as well as equipment with cost of $85,000, a net book value of $55,000 and a fair value of $75,000. How much will Joe's capital account be credited for?

1 answer

Joe's capital account will be credited for the total value of his contributions to the partnership.

The accounts receivable contribution has a net realizable value of $20,000, so Joe's capital account will be credited for this amount.

The equipment contribution has a fair value of $75,000, so Joe's capital account will be credited for this amount.

Therefore, Joe's capital account will be credited for a total of $20,000 + $75,000 = $95,000.