Question

nd Maria Paxton form a partnership (not related to above problem) by assets of their separate businesses. George contributes accounts combining the receivable with a face amount of $34,000 and equipment with a cost o accumulated depreciation of $210,000. The partners priced at $25 are not to be accepted by the partnership, and that $3,400 is a reasonable allowance for tne uncollectibility of the remainin $77,700 and merchandise inventory of $77,330. The partners agree that the f $440,000 and agree that the equipment is to be 0,000, that $1,330 of the accounts receivable are completely worthless and g accounts receivable. Martha contributes cash of merchandise inventory is to be priced at $67,500. Required: Journalize the entries to record in the partnership accounts (a) Anna's investment and (b) Maria's investment.

Answer 1

Note: In the beginning, the question say that the partnership is of Anna and Maria. Also at the end, it has been said to journalize Anna’s Investment and Maria’s Investment.

But in between, the names are George and Martha. It has been considered as a printing mistake. George is replaced by Anna and Maria is replaced by Martha is the solution.

Books of the partnership firm

Journal Entries

Accounts Receivable A/c                 Dr 32,670

Equipment A/c                                  Dr 250,000

                     To Provision for doubtful debts           3,400

                     To Anna’s Capital A/c                         279,270

(Being assets taken over from Anna at the agreed consideration)

Cash A/c                                        Dr 77,700

Inventory Ac                                Dr 67,500

                           To Maria’s Capital A/c              145,200

(Being assets taken over from Maria at the agreed consideration)

Workings:

Accounts receivable = 34,000 – 1,330 = 32,670

Provision for doubtful debts is the amount which have been provided for as allowance for uncollectibility = 3,400

Inventory is valued at an agreed amount of 67,500