Question

Instructions 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, $22,990; accounts receivable with a face amount of $159,400 and an allowance for doubtful accounts of $3,950, merchandise inventory with a cost of $83,280, and equipment with a cost of $123,390 and accumulated depreciation of $41,930. The partners agree that $5,790 of the accounts receivable are completely worthless and are not to be accepted by the partnership, that $5,120 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 $97,030, and that the equipment is to be valued at $81,690. On December 1, journalize the partnership's entry to record Payne's investment. Refer to the Chart of Accounts for exact wording of account titles.

Answer 1

Date	Description	Post. Ref.	Debit	Credit	Assets	Liabilities	Equity
December 1	Cash		22990		↑
	Accounts Receivable		153610		↑
	Merchandise Inventory		97030		↑
	Equipment		81690		↑
	Allowance for Doubtful Accounts			5120	↓
	Kimberly Payne, Capital			350200			↑

Accounts Receivable = 159400-5790 = 153610