Question

Requirements 1. Journalize the contributions of Douglas and Geringer to the partnership. 2. Prepare the partnership balance sheet at December 31, 2018 PrintI Done nd then click Check Answer Clear All

Answer 1

	Contribution of assets to partnership firm by partners is recorded at the fair market value.
	Fair Market Value
		Douglas	Gerigner	Total
	Cash	$7,000	$6,000	$13,000
	Accounts receivable	$23,000	$8,000	$31,000
	Merchandise Inventory	$50,000	$36,000	$86,000
	Plant Assets, net	$99,000	$53,000	$152,000
	Accounts Payable	$31,000	$18,000	$49,000
	Other Accrued Payable	$9,000		$9,000
	Notes payable	$56,000		$56,000
	Capital	$83,000	$85,000	$168,000
1	Journal Entry for the contribution of Douglas and Gerigner to the partnership
Date	Account Titles and Explanation	Debit	Credit
31-Dec	Cash	$7,000
	Accounts receivable	$23,000
	Merchandise Inventory	$50,000
	Plant Assets, net	$99,000
	Accounts payable		$31,000
	Other Accrued Liabilities		$9,000
	Notes payable		$56,000
	Douglas Capital		$83,000
	(to record the contribution of Douglas to the partnership)
31-Dec	Cash	$6,000
	Accounts receivable	$8,000
	Merchandise Inventory	$36,000
	Plant Assets, net	$53,000
	Accounts payable		$18,000
	Gerigner Capital		$85,000
	(to record the contribution of Gerigner to the partnership)
2	Partnership Balance sheet at December 31, 2018
	Assets	Amount
	Cash	$13,000
	Accounts receivable	$31,000
	Merchandise Inventory	$86,000
	Plant Assets, net	$152,000
	Total Assets	$282,000
	Liabilities and Partner's Capital
	Accounts Payable	$49,000
	Other Accrued Payable	$9,000
	Notes payable	$56,000
	Total Liabilities	$114,000
	Douglas Capital	$83,000
	Gerigner Capital	$85,000
	Total Liabilities and Capital	$282,000