Question

As part of the initial investment, Ray Blake contributes equipment that had originally cost $97,300 and on which accumulated depreciation of $72,975 has been recorded. If similar equipment would cost $140,300 to replace and the partners agree on a valuation of $48,800 for the contributed equipment, what amount should be debited to the equipment account

Answer 1

Answer:

$48,800

Explanation:

the computation of the amount that should be debited to  the equipment account is as follows:

Given that

The cost of an equipment is $97,300

the accumulated depreciation is $72,975

The replacement cost is $140,300

And, the valuation of the equipment is $48,800

So based on the above information, the amount that should be debited is equivalent to the valuation of the equipment i.e. $48,800