Recording partner\'s original investment InstructionsC Chart of Accounts Journal

Question

Recording partner's original investment InstructionsC Chart of Accounts Journal Instructions Kimberly Payne and Arionna Maples decide to form a partnership by combining the assets of their separate businesses. Payne contributes the tollowing assets to the partnership: cash, $25,230; accounts receivable with a face amount of $150,960 and an allowance tor doubtful accounts of $3,970; merchandise inventory with a cost of $89,120; and equipment with a cost of $138,820 and accumulated depreciation of $41,460. The partners agree that $5,620 ot the accounts receivable are completely worthless and are not to be accepted by the partnership, that $5,240 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 $103,020, and that the equipment is to be valued at $91,740. On December 1, journalize the partnership's entry to record Payne's investment. Refer to the Chart of Accounts for exact wording of account tities.

Explanation / Answer

Solution:

Journal Entries Event Particulars Debit Credit 1 Cash Dr $25,230.00 Accounts receivables Dr ($150,960 - $5,620) $145,340.00 Merchandise inventory Dr $103,020.00 Equipment Dr $91,740.00           To Allowance for doubtful accounts $5,240.00           To Payne's Capital $360,090.00 (To record Payne investment in partnership)

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