Question

As part of the initial investment, Jackson contributes accounts receivable that had a balance of $25,581 in the accounts of a sole proprietorship. Of this amount, $1,347 is deemed completely worthless. For the remaining accounts, the partnership will establish a provision for possible future uncollectible accounts of $807. The amount debited to Accounts Receivable for the new partnership is a.$25,581

Answer 1

The amount debited to the Accounts Receivable for the new partnership is:

= $2,434.

Step-by-step explanation:

a) Data and Calculations:

Accounts receivable balance = $25,581

less amount deemed completely worthless = $1,347

Balance after deduction = $2,434.

Provision for possible future uncollectible accounts = $807

b) The Accounts Receivable balance will not exclude the $807 provision for possible future uncollectible accounts. The probability of not collecting the accounts is not established.