Question

Exercise 15-2 Tom and Julie formed a management consulting partnership on January 1, 2016. The fair value of the net assets invested by each partner follows: Tom Julie Cash $14,300 $12,500 Accounts receivable 7,600 5,400 Office supplies 1,900 900 Office equipment 29,400 — Land — 30,400 Accounts payable 1,900 5,300 Mortgage payable — 19,900 During the year, Tom withdrew $14,000 and Julie withdrew $12,600 in anticipation of operating profits. Net profit for 2016 was $53,200, which is to be allocated based on the original net capital investment.

(a) Prepare journal entries to: 1. Record the initial investment in the partnership. 2. Record the withdrawals 3. Close the Income Summary and Drawing accounts. (Round intermediate calculations to 6 decimal places, e.g. 1.576843 answers to 0 decimal places, e.g. 5,125. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) No. Account Titles and Explanation Debit Credit 1. (To record initial investment by Tom) (To record initial investment by Julie) 2. (To record Tom's drawings) (To record Julie's drawings) 3. (To close income summary account) (To close drawings accounts) SHOW LIST OF ACCOUNTS

Answer 1

Journal Entries
No.	Particulars	Debit	Credit
1)
	Cash	$      14,300
	Accounts Receivable	$         7,600
	Office Supplies	$         1,900
	Office equipment	$      29,400
	To Accounts Payable		$         1,900
	To Tom, capital		$      51,300
	(To record initial investment by Tom)
	Cash	$      12,500
	Accounts Receivable	$         5,400
	Office Supplies	$            900
	Land	$      30,400
	To Accounts Payable		$         5,300
	To Mortgage Payable		$      19,900
	To Julie, Capital		$      24,000
	(To record initial investment by Julie)
2)
	Tom, Withdrawal	$      14,000
	To Cash		$      14,000
	(To record Tom's drawings)
	Julie, Withdrawal	$      12,600
	To Cash		$      12,600
	(To record Julie's drawings)
3)	Income Summary	$      53,200
	To Tom, capital		$      36,244
	To Julie, Capital		$      16,956
	(To close income summary account)
4)	Tom, Withdrawal	$      14,000
	To Tom, capital		$      14,000
	Julie, Withdrawal	$      12,600
	To Julie, Capital		$      12,600
	(To close drawings accounts)

Is this correct?