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Chani contributes equipment to a partnership that she purchased 2 years ago for $\$ 10,000$ . The current book value is $\$ 7,500$ and the market value is $\$ 9,000$ . At what value should the partnership record the equipment?A. $\$ 10,000$B. $\$ 9,000$C. $\$ 7,500$D. none of the above

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Chapter 15

Partnership Accounting

Section 2

Describe How a Partnership Is Created, Including the Associated Journal Entries

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so we see that there's a new machine that cost 100 $20,000. So since it's knew that that time zero and the cost is 1 20 1000 and then we see that at 10 years, the value is 4000. All right, so we want to find a formula that gives us the value of the machine. So what this is going to look like is we first need to find the slope. So for party, we need to find Slope first. Um and this is going to look like 120,000 minus 4000 over zero, minus 10. What that looks like is 116,000 over a negative 10 which will give us 11,600 a negative 11,600 as our M value. With that, we now need to. Since we're finding the formula, we need Teoh finally finish the equation. So we're going to use this point, um, to determine it. So 1 20,000 is the Y value, which is going to equal negative 11,600 Uh, time zero plus B. That means that B equals 120,000. So our formula, our value formula will be, well, USVI, for Value V equals negative 11,600 t for the number of years plus 1 20,000 So that's the formula right there. And for Part B, it's asking us to determine from the value. After eight years stop all we have to do. They're just put eight in for the value of tea. So it's going to be V equals negative. 11,600 times eight plus 120,000. 11,600 Negative 1600 times eight is negative 92,800. So V equals negative 92,800 and that still plus 1 20,000 So now if we take 120,000 minus 92,800 that tells us that the value of the machine at eight years is $27,200.

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