Jesse and Tim form a partnership by combining the assets of their separate businesses. Jesse contributes accounts receivable with a face amount of $48,000 and equipment with a cost of $177,000 and accumulated depreciation of $104,000. The partners agree that the equipment is to be valued at $68,500, that $3,600 of the accounts receivable are completely worthless and are not to be accepted by the partnership, and that $2,500 is a reasonable allowance for the uncollectibility of the remaining accounts receivable. Tim contributes cash of $22,000 and merchandise inventory of $44,500. The partners agree that the merchandise inventory is to be valued at $48,000.

Required:

Journalize the entries to record in the partnership accounts (a) Jesse's investment and (b) Tim's investment. Refer to the Chart of Accounts for exact wording of account titles.

Question

Business

Mahoney

29 December, 04:12

Jesse and Tim form a partnership by combining the assets of their separate businesses. Jesse contributes accounts receivable with a face amount of $48,000 and equipment with a cost of $177,000 and accumulated depreciation of $104,000. The partners agree that the equipment is to be valued at $68,500, that $3,600 of the accounts receivable are completely worthless and are not to be accepted by the partnership, and that $2,500 is a reasonable allowance for the uncollectibility of the remaining accounts receivable. Tim contributes cash of $22,000 and merchandise inventory of $44,500. The partners agree that the merchandise inventory is to be valued at $48,000.

Required:

Journalize the entries to record in the partnership accounts (a) Jesse's investment and (b) Tim's investment. Refer to the Chart of Accounts for exact wording of account titles.

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Giana Cardenas · Answer 1

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Explanation:

Journal Entries to be recorded in the books of Partnership accounts

a) Jesse's Investment

Account Name Debit ($) Credit ($)

Accounts Receivable (48,000-3600) 44300

Equipment (Agreed Price) 68,500

Allowance for Doubtful Debts 2500

Jesse, Capital A/c (Balancing Figure) 110300

b. Tim's Investment

Account Name Debit ($) Credit ($)

Cash 22000

Inventory (At Agreed price) 48000

Tim Capital 70,000