Kimberly Payne and Arionna Maples decide to form a partnership by combining the assets of their separate businesses. Payne contributes the following assets to the partnership: cash, $20,000; accounts receivable with a face amount of $145,000 and an allowance for doubtful accounts of $4,200; merchandise inventory with a cost of $92,000; and equipment with a cost of $136,000 and accumulated depreciation of $45,000. The partners agree that $5,000 of the accounts receivable are completely worthless and are not to be accepted by the partnership, that $4,400 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 $101,700, and that the equipment is to be valued at $81,200. Journalize the partnership's entry to record Payne's investment.
Kimberly Payne and Arionna Maples decide to form a partnership by combining the assets of their separate businesses. Payne contributes the following assets to the partnership: cash, $20,000; accounts receivable with a face amount of $145,000 and an allowance for doubtful accounts of $4,200; merchandise inventory with a cost of $92,000; and equipment with a cost of $136,000 and accumulated depreciation of $45,000. The partners agree that $5,000 of the accounts receivable are completely worthless and are not to be accepted by the partnership, that $4,400 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 $101,700, and that the equipment is to be valued at $81,200. Journalize the partnership's entry to record Payne's investment.
Chapter21: Partnerships
Section: Chapter Questions
Problem 2BCRQ
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Transcribed Image Text:Kimberly Payne and Arionna Maples decide to form a partnership by combining the assets
of their separate businesses. Payne contributes the following assets to the partnership:
cash, $20,000; accounts receivable with a face amount of $145,000 and an allowance for
doubtful accounts of $4,200; merchandise inventory with a cost of $92,000; and
equipment with a cost of $136,000 and accumulated depreciation of $45,000. The
partners agree that $5,000 of the accounts receivable are completely worthless and are
not to be accepted by the partnership, that $4,400 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 $101,700, and that the equipment is to be valued at $81,200.
Journalize the partnership's entry to record Payne's investment.
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