Question

dance E12-7 Terry, Nick, and Frank are forming The Doctor Partnership. Terry is transferring $30,000 of personal cash and equipment worth $25,000 to the partnership. Nick owns land worth $28,000 and a small building worth $75,000, which he transfers to the partnership. There is a long-term mortgage of $20,000 on the land and building, which the partnership assumes. Frank transfers cash of $7,000, accounts receivable of $36,000, supplies worth $3,000, and equipment worth $27,000 to the partnership. The partnership expects to col- lect $32,000 of the accounts receivable. Instructions Prepare a classified balance sheet for the partnership after the partners' investments on December 31, 2017.

Answer 1

| Amount $ 37,000 $72,000 $ 75,000 Solution :- Balance sheet of Doctor partnership as on December 31, 2017 Particulars Amount Current Assets :- (1) cash [30,000 + 7000] (2) Accounts Receivable (36,000 - 4000] $ 32,000 (3) supplies $3,000 Total current assets : propenty -plant & equipment: Land (28.000] $ 28,000 Building [75,000] Equipment (25,000+ 27,000] $ 52,000 . Total property, plant & Equipment Total Assets :- long term liabilikes: mortage payable owners Equity Terry capital $ 55,000 Nick capital $83,000 Frank capital $ 69,000 Total owner's equity Total liabilities and owner's Equity :- $ 155,000 $227,000 $ 20,000 $207,000 $227,000

wõiting :- (Terry capital : Personal cash - $30,000 Equipment - $ 25,000 Total !- $55,000 (2) Nick capital: Land Building - $75,000 long term Mortgage - ($ 20,000) $ 28,000 Total: $83,000 (3) Frank capital - Cash - $7,000 Accounts Receivable - $ 36.000 supplies - $ 3000 Equipment - $ 27,000 lesbi- allowance fos (4,000) bad debt - $ 69,000