As Part of the Initial Investment, Ray Blake Contributes Equipment

question 104

Multiple Choice

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) $29,000
• B) $150,000
• C) $125,000
• D) $100,000

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Definitions:

Franchisor

The owner of the trade name or trademark in a franchise.

Non-Exclusive Territory

A designated area where more than one entity is granted rights or privileges, such as sales or distribution, by an agreement.

Limited Liability Partnership

A partnership arrangement in which some or all partners have limited liabilities, protecting personal assets from business debts and liabilities.

Separate Legal Entity

An entity that is legally distinct from its owners or members, capable of having its own rights, duties, and obligations.