Terry, Nick, and Frank are forming The Doctor Partnership. Terry is transferring

Question

Terry, Nick, and Frank are forming The Doctor Partnership. Terry is transferring $29,500 of personal cash and equipment worth $25,100 to the partnership. Nick owns land worth $18,000 and a small building worth $75,300, which he transfers to the partnership. There is a long-term mortgage of $19,400 on the land and building, which the partnership assumes. Frank transfers cash of $7,000, accounts receivable of $36,600, supplies worth $2,800, and equipment worth $22,700 to the partnership. The partnership expects to collect $31,200 of the accounts receivable.

Prepare a classified balance sheet for the partnership after the partners’ investments on December 31, 2017. (List current assets in order of liquidity. List Property, Plant and Equipment in order of Land, Buildings and Equipment.)

Assets

Liabilities and Owners’ Equity

For the Year Ended December 31 , 2017December 31 , 2017For the Quarter Ended December 31 , 2017

Assets

Liabilities and Owners’ Equity

Possible accounts you can use in the answer Current AssetsCurrent LiabilitiesIntangible AssetsLong-term InvestmentsLong-term LiabilitiesProperty, Plant and EquipmentOwners’ EquityTotal AssetsTotal Current AssetsTotal Current LiabilitiesTotal Intangible AssetsTotal LiabilitiesTotal Liabilities and Owners’ EquityTotal Long-term InvestmentsTotal Long-term LiabilitiesTotal Property, Plant and EquipmentTotal Owners’ Equity

Explanation / Answer

ans)

Assets
Current Assets
Cash (29500 + 7000) 36500
Accounts Receivable 36,600
Less: Allowance for Doubtful Accounts (5400) 31200
Supplies 2800
Total Current Assets 70500

Property, Plant and Equipment
Land 18000
Building 75300
Equipment (25100 + 22700) 47800
Total Property, Plant and Equipment 141100  

Total Assets 211600

Liabilities
Long-Term Liabilities
Mortgage Payable 19400
Owners' Equity
Terry, Capital ( 29500 + 25100) = 54600   
Nick, Capital ( 18000 + 75300 -19400) = 73900
Frank, Capital (7000 + 31200 + 2800 + 22700) = 63700
Total Owners' Equity 192200
Total Liabilities and Owners' Equity 211600

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