Answer:
1. April 1, 20Y1
Dr Bank $15,100
Dr Inventory $40,800
Cr Whitney Lang Capital $55,900
April 1, 20Y1
Dr Bank $52,900
Dr Equipment 43,900
Dr Account Receivable $18,700
Cr Account Payable $8,200
Cr Notes Payable 5,000
Cr Allowance for Doubtful $1,300
Cr Eli Capri Capital $101,000
2.CURRENT LIABILITIES $171,400
ASSETS $171,400
3. March 31, 20Y2
Dr Revenue $598,000
Cr Expenses $480,000
Cr Profit & Loss $118,000
March 31, 20Y2
Dr Whitney Lang Capital $40,000
Dr Eli Capri Capital $30,000
Cr Cash $70,000
Explanation:
1. Preparation of the journal entries to record the investments of Lang and Capri in the partnership accounts.
April 1, 20Y1
Dr Bank $15,100
Dr Inventory $40,800
Cr Whitney Lang Capital $55,900
($15,100+$40,800)
( Being Cash and Inventory received from Eric Keene as capital contribution)
April 1, 20Y1
Dr Bank $52,900
($101,000+$1,300+5,000+$8,200-43,900-$18,700)
Dr Equipment 43,900
Dr Account Receivable $18,700
Cr Account Payable $8,200
Cr Notes Payable 5,000
Cr Allowance for Doubtful $1,300
Cr Eli Capri Capital $101,000
( Being Capital Contribution by Renee Wallace in form of Assets, cash and Liabilities)
2. Preparation of a balance sheet as of April 1, 20Y1, the date of formation of the partnership of Lang and Capri.
Balance sheet as on April 1, 20Y1,
Particulars Amount($)
Partners Capital A/c
Whitney Lang $55,900
Eli Capri $101,000
$156,900
CURRENT LIABILITIES
Account Payable $8,200
Notes Payable $5,000
Allowance for doubtful Debts $1,300
TOTAL $171,400
($156,900+$8,200+$5,000+$1,300)
ASSETS
Equipment $43,900
Account receivable $18,700
Inventory $40,800
Cash $68,000
($15,100+$52,900)
TOTAL $171,400
($43,900+$18,700+$40,800+$68,000)
3. Preparation of journal entries to close the revenues and expenses and the drawing accounts at March 31, 20Y2
March 31, 20Y2
Dr Revenue $598,000
Cr Expenses $480,000
Cr Profit & Loss $118,000
( Being Revenue and Expenses posted to Profit & loss A/c)
March 31, 20Y2
Dr Whitney Lang Capital $40,000
Dr Eli Capri Capital $30,000
Cr Cash $70,000
($40,000+$30,000)
( Being Drawing from Capital A/c recorded)
