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JAMB Principles of Accounts 1999 Question 32

Question 32

Partnership Accounts

As part of the initial investment, a partner contributes office equipment that originally cost ₦20,000 and on which provision for depreciation of ₦12,500 had been recorded. If the partners agree on a valuation of ₦9,000 for the equipment, what amount should be debited to the office equipment account?

  1. A.₦7,500
  2. B.₦9,000
  3. C.₦12,500
  4. D.₦20,000.
Show the answer and explanation

Answer: B (₦9,000)

Explanation

Assets brought in are recorded at the value agreed by the partners: ₦9 000.