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3 years ago

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Michelle Hamilton and Bill Rossi decide to form a partnership. Hamilton invests $35,000 cash and accounts receivable of $30,000

less allowance for doubtful accounts of $2,000. Rossi contributes $25,000 cash and equipment having a $6,000 book value. It is agreed that the allowance account should be $3,000 and the fair value of the equipment is $10,000. Prepare the necessary journal entry to record the formation of the partnership.

1 answer:

Georgia [21]3 years ago

5 0

Answer:

Dr Cash $60,000

Dr Accounts Receivable$30,000

Dr Equipment $10,000

Cr Allowance for Doubtful Accounts $3,000

Cr Hamiltion, Capital $62,000

Cr Rossi, Capital $35,000

Explanation:

Preparation to record the necessary journal entry to record the formation of the partnership.

Dr Cash $60,000

($35,000 + $25,000)

Dr Accounts Receivable$30,000

Dr Equipment $10,000

Cr Allowance for Doubtful Accounts $3,000

Cr Hamiltion, Capital $62,000

($35,000 + $30,000 – $3,000)

Cr Rossi, Capital $35,000

($25,000 + $10,000)

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4 years ago

Merchandise with a list price of $4,700 is purchased on account, terms FOB shipping point, 1/10, n/30. The seller prepaid freigh

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There are two methods to record purchases in the perpetual inventory system. The net method is another means of recording purchases which initially records the invoice at it net amount of any cash discount giving management an advantage in controlling and monitoring cash payments.

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3 years ago

Morrison and Greene have decided to form a partnership. They have agreed that Morrison is to invest $150,000 and that Greene is

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Answer:

1) net income = $115,000

a) Morrison receives $57,500

Greene receives $57,500

b) Morrison receives $86,250

Greene receives $28,750

c) Morrison receives $38,333

Greene receives $76,667

d) Morrison receives ($150,000 x 6%) + $51,500 = $60,500

Greene receives ($50,000 x 6%) + $51,500 = $54,500

e) Morrison receives $3,750 + $40,000 = $43,750

Greene receives $1,250 + $70,000 = $71,250

f) Morrison receives $3,750 + $40,000 = $43,750

Greene receives $1,250 + $70,000 = $71,250

2) net income = $200,000

a) Morrison receives $100,000

Greene receives $100,000

b) Morrison receives $150,000

Greene receives $50,000

c) Morrison receives $66,667

Greene receives $133,333

d) Morrison receives $9,000 + $94,000 = $101,000

Greene receives $3,000 + $94,000 = $97,000

e) Morrison receives $9,000 + $40,000 + $39,000 = $88,000

Greene receives $3,000 + $70,000 + $39,000 = $112,000

f) Morrison receives $9,000 + $40,000 + $30,000 = $79,000

Greene receives $3,000 + $70,000 + $18,000 + $30,000 = $121,000

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