Question

Instructions Kimberly Payne and Arionna Maples decide to form a partnership by combining the assets of their separate businesses. Payne contributes the folowing 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 $48,490 The partners agree that $5,890 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 $100,740, and that the equipment is to be valued at $80,180 On December 1, jounalize the partnership's entry to record Payne's investment Refer to the Chart of Accounts for exact wording of account titles

Answer 1

Answer

--The correct journal entry on Dec 1 would be:

Date	Accounts title	Debit	Credit
01-Dec	Cash	$23,820
	Accounts receivables [$154070 - 5890]	$148,180
	Merchandise Inventory [market price]	$100,740
	Equipment [at Fair value]	$80,180
	Allowance for Doubtful Accounts		$5,120
	Payne, Capital		$347,800