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

Question

Quizplus · Accepted Answer

The amount debited to Accounts Receivable for the new partnership is the net value of the accounts receivable after taking into consideration the bad debt and provision for uncollectible accounts. Therefore, the calculation is: 
$22,500 (original balance) - $3,000 (bad debt) - $1,500 (provision) = $18,000 
So the amount debited to Accounts Receivable is $18,000, which is choice D.

As Part of the Initial Investment, Jackson Contributes Accounts Receivable