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 $13,300 7,700 1,900 32,000 Julie $11,600 6,600 900 Cash Accounts receivable Office supplies Office equipment Land Accounts payable Mortgage payable 2,100 30,500 5,200 17,500 During the year, Tom withdrew $15,500 and Julle withdrew $12,900 in anticipation of operating profits. Net profit for 2016 was $52,600, 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 o decimal places, e.g. 5,125. Credit account titles are automatically indented when amount is entered. Do not indent m entry is required, select "No Entry" for the account titles and enter o for the amounts.) No. Account Titles and Explanation Debit Credit 1. (To record initial investment by Tom)

Answer 1

Tom and Julie Journal Enteries Trans Particulars 1 Cash a/c Dr. Accounts receivable a/c Dr. Office supplies a/c Dr. Office equipment a/c Dr. To Accounts payable To Tom, Capital (Initial Investment by Tom.) Debit in $ Credit in $ 13300 7700 1900 32000 2100 52800 11600 6600 900 30500 Cash a/c Dr. Accounts receivable a/c Dr. Office supplies a/c Dr. Land a/c Dr. To Accounts payable To Mortgage payable To Julie, Capital (Initial Investment by Julie.) 5200 17500 26900 2 15500 Tom, Drawing a/c Dr. To Cash (To record Tom's Withdrawals) 15500 12900 Julie, Drawings a/c Dr. To Cash (To record Julie's Withdrawals) 12900 3 34847 17753 Income summary a/c Dr. 52600 To Tom, Capital To Julie, Capital (Net Profiit on initial net capital) 52800 + 26900 = 79700 52600 x 52800 / 79700 = 34847 52600 x 26900 / 79700 = 17753 Dr. 15500 Tom, Capital a/c To Tom, Drawing (Drawings charged) 15500 12900 Julie, Capital a/c Dr. To Julie, Drawings (Drawings charged) 12900