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13 January, 16:13

Jesse and Tim form a partnership by combining the assets of their separate businesses. Jesse contributes accounts receivable with a face amount of $46,000 and equipment with a cost of $185,000 and accumulated depreciation of $105,000. The partners agree that the equipment is to be valued at $67,800, that $3,300 of the accounts receivable are completely worthless and are not to be accepted by the partnership, and that $1,900 is a reasonable allowance for the uncollectibility of the remaining accounts receivable. Tim contributes cash of $20,000 and merchandise inventory of $45,000. The partners agree that the merchandise inventory is to be valued at $48,500. Journalize the entries to record in the partnership accounts (a) Jesse's investment and (b) Tim's investment. If an amount box does not require an entry, leave it blank.

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  1. 13 January, 19:42
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    (a) Jesse's investment is 108400 (b) Tim's investment is 68500

    Explanation:

    Solution

    We Journalize the entries for both Jesse and Tim in the books of Partnership accounts

    (a) Jesse's Investment

    Account Name Debit ($) Credit ($)

    Accounts Receivable

    (46000-3500) 42500

    Equipment (Agreed Price) 67800

    Allowance for Doubtful Debts 1900

    Jesse, Capital A/c 108400

    (b) Tim's Investment

    Cash 20000

    Inventory (At Agreed price) 48500

    Tim Capital 68500
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