As Part of the Initial Investment, a Partner Contributes Equipment

question 134

Multiple Choice

As part of the initial investment, a partner 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 $38,000 for the contributed equipment, what amount should be debited to the equipment account?

• A) $38,000
• B) $150,000
• C) $125,000
• D) $100,000

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Definitions:

Stimulus

An occurrence or condition that prompts a reaction in a living being.

Reminiscence Bump

The tendency for older adults to have increased recollection for events that occurred during their adolescence and early adulthood.

Memory Retrieval

The process of recalling or bringing into consciousness information or experiences stored in memory.

Youth

The period of life between childhood and adulthood; characterized by the development and maturation of the individual.