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, $23,820, accounts receivable with a face amount of $154,070 and an allowance for doubtful accounts of $3,930, merchandise inventory with a cost of $88,010, and equipment with a cost of $123,640 and accumulated depreciation of 548,490. The partners agree that $5,890 of the accounts receivable are completely worthless and are not to be accepted by the partnership, that S5, 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 $100,740, and that the equipment is to be valued at $80,180. 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	Accounts titles and Explanation	Debit (in $)	Credit (in $)
December 1	Cash	$ 23,820
	Accounts Receivable ( $ 154,070 (-) $ 5,890 )	$ 148,180
	Merchandise Inventory	$ 100,740
	Equipment	$ 80,180
	Allowance for Doubtful Accounts		$ 5,120
	Kimberly Payne's Capital - Bal. Fig.		$ 347,800
	(To record the Payne's Investment )