Question

As part of the initial investment, Ray Blake contributes equipment that had originally cost $125,000 and on which accumulated depreciation of $100,000 has been recorded. If similar equipment would cost $150,000 to replace and the partners agree on a valuation of $29,000 for the contributed equipment, what amount should be debited to the equipment account?a. $125,000b. $150,000c. $29,000d. $100,00

Answer 1

Answer:

c. $29,000

Explanation:

In a partnership, the equipment should be recorded at that amount in which the partners agreed because each partner's consent is necessary for a partnership firm.

Whether original cost or replacing cost is given in the question but we considered that cost in which the partner give their consent

So, the equipment amount should be debited at $29,000 instead of the original cost or the replacing cost