18. Jesse and Tim form a partnership by combining the assets of their separate b

Question

18.

Jesse and Tim form a partnership by combining the assets of their separate businesses. Jesse contributes accounts receivable with a face amount of $47,000 and equipment with a cost of $178,000 and accumulated depreciation of $105,000. The partners agree that the equipment is to be valued at $68,200, that $3,600 of the accounts receivable are completely worthless and are not to be accepted by the partnership, and that $1,500 is a reasonable allowance for the uncollectibility of the remaining accounts receivable. Tim contributes cash of $21,000 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.

Explanation / Answer

Journal Entry Date Particulars Dr. Amt Cr. Amt. a. Accounts Receivable    43,400.00 Equipment    68,200.00     Allowance for Doubtful Accounts        1,500.00     Jesse, Capital    110,100.00 (To record the capital introduced by Jesse) b. Cash    21,000.00 Mechandise Inventory    48,500.00    Tim, Capital      69,500.00 (To record the capital introduced by Tim)

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