A new partner contributes accounts receivable to a partnership which appear in the ledger of his sole proprietorship at $20,500 and there was an allowance for doubtful accounts of $750. If $600 of the accounts receivables are completely worthless, the partnership accounts receivable should be debited for $19,900.

Question

Quizplus · Accepted Answer

To arrive at the correct amount to be debited to partnership accounts receivable, we need to subtract the allowance for doubtful accounts and the amount of completely worthless accounts from the original accounts receivable.

$20,500 (original accounts receivable) - $750 (allowance for doubtful accounts) - $600 (completely worthless accounts) = $19,150

Therefore, the partnership accounts receivable should be debited for $19,150, not $19,900. However, it is worth noting that the question does not specify whether the partnership assumed responsibility for the entire accounts receivable balance or only a portion of it, which could potentially affect the final amount to be debited.

A New Partner Contributes Accounts Receivable to a Partnership Which