Question

Recording Partner's Original Investment

Kimberly Payne and Arionna Maples decide to form a partnership by combining the assets of their separate businesses. Payne contributes the following assets to the partnership: cash, $11,170; accounts receivable with a face amount of $117,290 and an allowance for doubtful accounts of $4,230; merchandise inventory with a cost of $84,570; and equipment with a cost of $136,050 and accumulated depreciation of $88,430.

The partners agree that $5,160 of the accounts receivable are completely worthless and are not to be accepted by the partnership, that $8,800 is a reasonable allowance for the uncollectibility of the remaining accounts, that the merchandise inventory is to be recorded at the current market price of $79,500, and that the equipment is to be valued at $60,000.

Journalize the partnership’s entry to record Payne’s investment. For a compound transaction, if an amount box does not require an entry, leave it blank.

Answer 1

Answer Partnership Firm Joyrnal Entries Coredit ($) Debit ($) Partju lars Date 1170 Or. Gsh Alc Cl17290 - 5160 112130 Accounts Receivable Ale Ale 79500 Or. Mercandise Inverbory 69000 Equipment Ale To Allouance for Ooybt fyl Debts AlE To Kimberig fag ne Gping! Ak (69l Figare) (Being assels braught ijto the partnewshie bysigers by the pantMer kimbeviy Pagrie) 8 800 254000 262800 Total 262800 Notes I $ 5/60 of Accounts Receivable are complebely Imrecovergble. Therefore, it is a Byd Debo Experse and telucel from the accounts vecengble. 2. Me egnlist Fnventoiy 15 recorded qt the cyirent manket price. 3. Equipment is vecognized q5 the Nel Dook Valye 4. Kimberly's layne's Gpityl is a oglencig Agure.