Question

Barton and Fallows form a partnership by combining the assets of their separate businesses. Barton contributes accounts receivable with a face amount of $46,000 and equipment with a cost of $192,000 and accumulated depreciation of $104,000. The partners agree that the equipment is to be valued at $87,000, that $3,900 of the accounts receivable are completely worthless and are not to be accepted by the partnership, and that $1,300 is a reasonable allowance for the uncollectibility of the remaining accounts receivable. Fallows contributes cash of $28,800 and merchandise inventory of $56,000. The partners agree that the merchandise inventory is to be valued at $60,500. Journalize the entries to record in the partnership accounts (a) Barton's investment and (b) Fallows's investment. If an amount box does not require an entry, leave it blank. (a) (b)

Answer 1

Solution:

Journal Entries
Event	Particulars	Debit	Credit
a	Equipment Dr	$87,000.00
	Accounts receivables Dr	$42,100.00
	To Allowance for doubtful accounts		$1,300.00
	To Barton's capital		$127,800.00
	(To record Barton contribution in partnership)
b	Cash Dr	$28,800.00
	Merchandise inventory Dr	$60,500.00
	To Fallows capital		$89,300.00
	(To record Fallows contribution in partnership)