As part of the initial investment, a partner contributes office equipment that originally cost N20,000 and on which provision for depreciation of N12,500 had been recorded. If the partners agree on a valuation of N9,000 for the equipment, what amount should be debited to the office equipment account?

  • A N7,500
  • B N9,000
  • C N12,500
  • D N20,000
jamb 1999accounting

The correct answer is B. N9,000

When a partner contributes an asset to the partnership, the asset is recorded at the agreed-upon valuation. In this case, the partners have agreed on a valuation of N9,000 for the office equipment.

Therefore, the office equipment account should be debited with the agreed valuation.

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