Question

E12-2 K. Decker, S. Rosen, and E. Toso are forming a partnership. Decker is transferring $50,000 of personal cash to the partnership. Rosen owns land worth $15,000 and a small building worth $80,000, which she transfers to the partnership. Toso transfers to the part- nership cash of $9,000, accounts receivable of $32,000, and equipment worth $39,000. The partnership expects to collect $29,000 of the accounts receivable Instructions (a) Prepare the journal entries to record each of the partners' investsnents (b) What amount would be reported as total owners' equity immediately after the investments?

Answer 1

ANSWER

As per the given question,

Journal entries to record each of Partner's investment in partnership

Sr No. Account title & Explanation Debit Credit Cash 50000 Capital – K.Decker 50000 (Capital introduced in cash) Long term asset - Land 15000 Long term asset - Building 80000 Capital - S. Rosen 95000 (Capital introduced in the form of land & building) Cash 9000 Accounts Receivable 32000 Long term asset - Equipment 39000 Allowance for doubtful debts 3000 Capital - E.Toso 77000 (Capital introduced in the form of cash, equipment & AR) study

b)

Calculation of Total amount as Owners Equity 1 K. Decker's Capital a/c $ 50,000 2 S. Rosen's Capital a/c $ 95,000 E. Toso's Capital A/C $ 77,000 Total $ 222,000

THANK YOU FOR THE QUESTION......KINDLY RATE...IT HELPS ME A LOT