As Part of the Initial Investment, Jackson Contributes Accounts Receivable

question 178

Multiple Choice

As part of the initial investment, Jackson contributes accounts receivable that had a balance of $22,500 in the accounts of a sole proprietorship. Of this amount, $3,000 is deemed completely worthless. For the remaining accounts, the partnership will establish a provision for possible future uncollectible accounts of $1,500. The amount debited to Accounts Receivable for the new partnership is

• A) $18,000
• B) $22,500
• C) $21,000
• D) $19,500

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Definitions:

Sales Supplies

Items and materials used in the process of selling goods or services.

Used

Items that have been previously owned or utilized by someone before being sold or transferred.

Selling and Administrative Expense

Costs unrelated to direct production of goods or services, including costs associated with sales, marketing, and general administration.

Assembly Line

A production method where components are sequentially attached to an item, resulting in an efficiently completed product.