Smiles and Scowls,two Sole Traders Form a Partnership by Combining

Multiple Choice

Smiles and Scowls,two sole traders form a partnership by combining their net assets. $\begin{array}{lcc} \text { Smiles contributes: }\\& \text { Cost value } & \text { Fair value } \\\text { Accounts Receivable } & \$ 10000 & \$ 8500 \\\text { Cash } & \$ 20000 &\\\text { Scowls contributes: }\\\text { Plant } & \$ 30000 & \$ 25000 \\\text { Accumulated Depreciation } & \$ 8000 & \\\text { Bank Overdraft } & \$ 11000 &\end{array}$ What will be the amount shown in the Allowance for Doubtful Debts account in the Balance sheet prepared after the formation of the partnership of Smiles and Scowls?

A) Nil
B) $1500
C) $1000
D) $500