Barton and Fallows form a partnership by combining the assets of their separate

Question

Barton and Fallows form a partnership by combining the assets of their separate businesses. Barton contributes accounts receivable with a face amount of $48,000 and equipment with a cost of $189,000 and accumulated depreciation of $104,000. The partners agree that the equipment is to be priced at $89,000, that $4,000 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. Fallows contributes cash of $28,500 and merchandise inventory of $56,000. The partners agree that the merchandise inventory is to be priced at $60,500.

Journalize the entries to record in the partnership accounts (a) Barton's investment and (b) Fallows' investment. If an amount box does not require an entry, leave it blank or enter "0".

(a)

  

  

  

  

  

  

  

  

  

  

  

  

(b)

  

  

  

  

  

  

  

  

  

(a)

  

  

  

  

  

  

  

  

  

  

  

  

(b)

  

  

  

  

  

  

  

  

  

Explanation / Answer

Equipment account Dr 89000 Accounts Receivable Dr 44000 To Allowance for doubtful debts 1500 To Barton's Capital 131500 Cash Account Dr 28500 Inventory Account Dr 60500 To Fallows Capital 89000

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