Working Papers, Chapters 1-17 for Warren/Reeve/Duchac's Accounting, 26th and Financial Accounting, 14th
26th Edition
ISBN: 9781305392373
Author: Carl Warren, Jim Reeve, Jonathan Duchac
Publisher: Cengage Learning
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Chapter 12, Problem 12.1EX
To determine
It is that form of organization which is owned and managed by two or more persons who invest and share the
Forming a Partnership
While forming the partnership, the contribution of assets by partners are debited to the partnership assets account; whereas the liabilities of the partnerships are credited to the partnership’s liabilities account, and the net amount of the investments of partners are credited to the partners’ individual capital account.
To record: The
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Recording Partner's Original Investment
Vanessa Kaiser and Mariah Newman decide to form a partnership by combining the assets of their separate businesses. Kaiser contributes the following assets to the partnership: cash, $25,800; accounts receivable with a face amount of $187,600 and an allowance for doubtful accounts of $5,400; merchandise inventory with a cost of $118,900; and equipment with a cost of $175,800 and accumulated depreciation of $58,200.
The partners agree that $6,000 of the accounts receivable are completely worthless and are not to be accepted by the partnership, that $5,700 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 $131,400, and that the equipment is to be valued at $104,900.
Journalize the partnership’s entry to record Kaiser’s investment. If an amount box does not require an entry, leave it blank.
fill in the blank 2
fill in the blank 3…
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Recording Partner's Original 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, $11,680; accounts receivable
with a face amount of $122,640 and an allowance for doubtful accounts of $4,430; merchandise inventory with a cost of $97,310; and equipment with a cost of $185,970 and accumulated depreciation of $120,880.
The partners agree that $5,400 of the accounts receivable are completely worthless and are not to be accepted by the partnership, that $9,200 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 $91,470, and that the equipment is to be valued at $82,010.
Journalize the partnership's entry to record Payne's investment. For a compound transaction, if an amount box does not require an entry, leave it blank.
EXERCISE 4. Journal Entries - Cash, non-cash, and industry contributions. Prepare and upload the journal entries
to record contributions of Kim and Krislam into the partnership under the following independent assumptions:
1. Cash contribution amounting to $45,000 each.
2. Kim contributed $35,000 cash and a store equipment with carrying value of $27,000. Krislam contributed
$15,000 cash and a delivery vehicle with a fair market value of $195,000. Kim and Krislam agreed that each
depreciable asset is overvalued by $4,000.
3. Kim contributed $10,000 cash and furniture and fixtures with carrying value of $32,000. Krislam contributed
$5,000 cash and a building with a fair market value of $295,000 and an unpaid mortgage of $27,500. Kim
and Krislam agreed that building is undervalued by $9,000.
4. Kim contributed $25,000 cash, a store equipment with fair market value of $47,000, and delivery vehicle with
a fair market value of $175,000. Krislam, an industrial partner, was to contribute her…
Chapter 12 Solutions
Working Papers, Chapters 1-17 for Warren/Reeve/Duchac's Accounting, 26th and Financial Accounting, 14th
Ch. 12 - Prob. 1DQCh. 12 - Prob. 2DQCh. 12 - Prob. 3DQCh. 12 - Prob. 4DQCh. 12 - Prob. 5DQCh. 12 - Prob. 6DQCh. 12 - Prob. 7DQCh. 12 - Prob. 8DQCh. 12 - Prob. 9DQCh. 12 - Prob. 10DQ
Ch. 12 - Prob. 12.1APECh. 12 - Prob. 12.1BPECh. 12 - Prob. 12.2APECh. 12 - Prob. 12.2BPECh. 12 - Prob. 12.3APECh. 12 - Prob. 12.3BPECh. 12 - Prob. 12.4APECh. 12 - Prob. 12.4BPECh. 12 - Prob. 12.5APECh. 12 - Prob. 12.5BPECh. 12 - Prob. 12.6APECh. 12 - Prob. 12.6BPECh. 12 - Prob. 12.7APECh. 12 - Prob. 12.7BPECh. 12 - Prob. 12.1EXCh. 12 - Prob. 12.2EXCh. 12 - Prob. 12.3EXCh. 12 - Prob. 12.4EXCh. 12 - Prob. 12.5EXCh. 12 - Prob. 12.6EXCh. 12 - Prob. 12.7EXCh. 12 - Prob. 12.8EXCh. 12 - Prob. 12.9EXCh. 12 - Prob. 12.10EXCh. 12 - Prob. 12.11EXCh. 12 - Prob. 12.12EXCh. 12 - Prob. 12.13EXCh. 12 - Prob. 12.14EXCh. 12 - Prob. 12.15EXCh. 12 - Prob. 12.16EXCh. 12 - Prob. 12.17EXCh. 12 - Statement of members equity, admitting new member...Ch. 12 - Distribution of cash upon liquidation Hewitt and...Ch. 12 - Distribution of cash upon liquidation David Oliver...Ch. 12 - Prob. 12.21EXCh. 12 - Prob. 12.22EXCh. 12 - Liquidating partnershipscapital deficiency...Ch. 12 - Prob. 12.24EXCh. 12 - Prob. 12.25EXCh. 12 - Prob. 12.26EXCh. 12 - Prob. 12.27EXCh. 12 - Prob. 12.28EXCh. 12 - Prob. 12.1APRCh. 12 - Prob. 12.2APRCh. 12 - Prob. 12.3APRCh. 12 - Prob. 12.4APRCh. 12 - Prob. 12.5APRCh. 12 - Prob. 12.6APRCh. 12 - Prob. 12.1BPRCh. 12 - Prob. 12.2BPRCh. 12 - Prob. 12.3BPRCh. 12 - Prob. 12.4BPRCh. 12 - Prob. 12.5BPRCh. 12 - Statement of partnership liquidation On August 3,...Ch. 12 - Prob. 12.1CPCh. 12 - Prob. 12.2CPCh. 12 - Revenue per employee The following table shows key...Ch. 12 - Prob. 12.4CP
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- Recording Partner's Original Investment Vanessa Kaiser and Mariah Newman decide to form a partnership by combining the assets of their separate businesses. Kaiser contributes the following assets to the partnership: cash, $19,820; accounts receivable with a face amount of $208,110 and an allowance for doubtful accounts of $7,510; merchandise inventory with a cost of $80,520; and equipment with a cost of $155,210 and accumulated depreciation of $100,890. The partners agree that $9,160 of the accounts receivable are completely worthless and are not to be accepted by the partnership, that $15,610 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 $75,690, and that the equipment is to be valued at $68,440. Journalize the partnership's entry to record Kaiser's investment. If an amount box does not require an entry, leave it blank. Accounts Payable Allowance for Doubtful Accounts Cash…arrow_forwardInstructions Instructions Chart of Accounts General Journal X Jesse and Tim form a partnership by combining the assets of their separate businesses. Jesse contributes accounts receivable with a face amount of $47,000 and equipment with a cost of $178,000 and accumulated depreciation of $102,000. The partners agree that the equipment is to be valued at $68,400, that $4,000 of the accounts receivable are completely worthless and are not to be accepted by the partnership, and that $2,200 is a reasonable allowance for the uncollectibility of the remaining accounts receivable. Tim contributes cash of $20,500 and merchandise inventory of $45,000. The partners agree that the merchandise inventory is to be valued at $48,500. Required: Journalize the entries to record in the partnership accounts (a) Jesse's investment and (b) Tim's investment. Refer to the Chart of Accounts for exact wording of account titles.arrow_forward1. 2. EXERCISE 4. Journal Entries - Cash, non-cash, and industry contributions. Prepare and upload the journal entries to record contributions of Kim and Krislam into the partnership under the following independent assumptions: 3. Page 4. 9 Cash contribution amounting to P45,000 each. Kim contributed P35,000 cash and a store equipment with carrying value of $27,000. Krislam contributed P15,000 cash and a delivery vehicle with a fair market value of P195,000. Kim and Krislam agreed that each depreciable asset is overvalued by $4,000. Kim contributed P10,000 cash and furniture and fixtures with carrying value of P32,000. Krislam contributed P5,000 cash and a building with a fair market value of P295,000 and an unpaid mortgage of P27,500. Kim and Krislam agreed that building is undervalued by P9,000. Kim contributed P25,000 cash, a store equipment with fair market value of P47,000, and delivery vehicle with a fair market value of P175,000. Krislam, an industrial partner, was to contribute…arrow_forward
- Problem 1: On January 1, 20x1, Rody and Noy formed a partnership. Rody and Noy contributed the following assets at formation: Rody Noy Cash 25,000 37,500 Inventory 18,750 Building 50,000 Equipment 18,750 The building is subject to a P12,500 mortgage, which was assumed by the partnership. They share profit and loss in the ratio of 60:40. Assuming Rody will invest (withdraw) cash so that his capital balance will equal to his profit and loss ratio, what is the total asset of the partnership after formation? (The correct answer is 246,875 but I need a solution/explanation)arrow_forwardQUESTION 2 Jesse and Tim form a partnership by combining the assets of their separate businesses. Jesse contributes accounts receivable with a face amount of $46,000 and equipment iwth a cost of $184,000 and accumulated depreciation of $101,000. The partners agree that the equipment is to be valued at $68,100, that $3,700 of the accounts receivable are complete worthless and are not to be accepted by the partnership, and that $1,800 is a reasonable allowance for the uncollectibility of the remaining accounts receivable. Tim contribues cash of $20,500 and merchandise inventory of $45,500. The partners agree that the merchandise inventory is to be valued at $49,000. ournalize the entries in the partnership accounts for (a Jesse's investment and (b) Tim's investment using the chart of accounts below. Accounts Receivable Cash Merchandise Inventory Ccounts Payable Ecumulated Depreciation Equipment Jesse, Capital Jesse, Drawing Supplies Tim. Capital Tim, Drawing owance for Doubtful Accounts…arrow_forwardShow the solution in good accounting form On March 1, 2018, X and Y formed a partnership. The partners contributed the following: X Y Cash P500,000 P400,000 Accounts Receivable 300,000 200,000 Allowance for doubtful accounts50,000 20,000 Inventory 150,000 100,000 Equipment 500,000 200,000 Accumulated depreciation 100,000 25,000 Accounts Payable 50,000 400,000 Note Payable 200,00 The partners agree on the following: a. P10,000 of the accounts receivable of X is to be written-off. b. An allowance for doubtful accounts of 15% is to be established on the remaining receivatbies of X and Y. C. The inventory of Y is to be valued at P140,000. D. The equipment of X is under depreciated by P20,000 and the equipment ofY has a fair value of P190,000. E.…arrow_forward
- Show the solution in good accounting form On March 1, 2018, X and Y formed a partnership. The partners contributed the following: X Y Cash P500,000 P400,000 Accounts Receivable 300,000 200,000 Allowance for doubtful accounts50,000 20,000 Inventory 150,000 100,000 Equipment 500,000 200,000 Accumulated depreciation 100,000 25,000 Accounts Payable 50,000 400,000 Note Payable 200,00 The partners agree on the following: a. P10,000 of the accounts receivable of X is to be written-off. b. An allowance for doubtful accounts of 15% is to be established on the remaining receivatbies of X and Y. C. The inventory of Y is to be valued at P140,000. D. The equipment of X is under depreciated by P20,000 and the equipment ofY has a fair value of P190,000. E.…arrow_forwardPartners Abada and Albano agreed to combine their businesses into a partnership. The statement of financial position accounts of Abada and Albano are shown below. ABADA ALBANO Book Value Agreed Value Book Value Agreed Value Cash ₱ 50,000 ₱ 50,000 ₱ 70,000 ₱ 70,000 Accounts Receivable 460,000 460,000 490,000 490,000 Allowance for Uncollectible Accounts 30,000 40,000 40,000 50,000 Merchandise Inventory 900,000 1,080,000 720,000 750,000 Equipment 180,000 120,000 90,000 70,000 Accumulated Depreciation 36,000 ----- 9,000 ----- Furnitures and Fixtures 120,000 90,000 ----- ----- Accumulated Depreciation 24,000 ----- ----- ----- Accounts Payable 540,000 540,000 360,000 360,000 Instruction: Assuming that the partnership is to open new set of books, give the journal entries to record the investment of Abada and Albano.arrow_forwardChapter 2: Partnerships Exercise - 1 Computing initial partner investments Careem and Labeeb establish an equal partnership in both cquity and profits to operate a used- furniture business under the name of C&L Furniture. Careem contributes furniture inventory that cost $120,000 and has fair value of $160,000. Labceb contributes $60,000 cash and delivery cquipment that cost $80,000 and has a fair valuc of $60,000. Required: Assume that the initial noncash contributions of the partners are recorded at fair market value. A) Compute the ending balance of cach capital account under the bonus and goodwill approaches. B) Prepare the journal entries of the initial investments under both approaches.arrow_forward
- Journalizing Partner's Original Investment Xi Lin contributed land, inventory, and $22,000 cash to a partnership. The land had a book value of $66,000 and a market value of $121,000. The inventory had a book value of $79,300 and a market value of $73,700. The partnership also assumed a $48,000 note payable owed by Lin that was used originally to purchase the land. Required: Provide the journal entry for Lin's contribution to the partnership. If an amount box does not require an entry, leave it blank.arrow_forwardDividing Partnership Income Black and Shannon have decided to form a partnership. They have agreed that Black is to invest $249,000 and that Shannon is to invest $83,000. Black is to devote one-half time to the business, and Shannon is to devote full time. The following plans for the division of income are being considered: a. Equal division. b. In the ratio of original investments. c. In the ratio of time devoted to the business. d. Interest of 5% on original investments and the remainder equally. e. Interest of 5% on original investments, salary allowances of $55,000 to Black and $85,000 to Shannon, and the remainder equally. f. Plan (e), except that Shannon is also to be allowed a bonus equal to 20% of the amount by which net income exceeds the total salary allowances. Required: For each plan, determine the division of the net income under each of the following assumptions: (1) net income of $142,000 and (2) net income of $230,000. Round answers to the nearest whole dollar. (1) (2)…arrow_forwardRevaluing and Contributing Assets to a Partnership Marquis Westbury invested $46,000 in the Trenton and Rainwater partnership for ownership equity of $46,000. Prior to the investment, equipment was revalued to a market value of $317,000 from a book value of $242,000. Daniel Trenton and Ann Marie Rainwater share net income in a 1:3 ratio. Required: a. Provide the journal entry for the revaluation of equipment. If an amount box does not require an entry, leave it blank. Equipment Daniel Trenton, Capital Ann Marie Rainwater, Capital Feedback Check My Work Cash 75,000 b. Provide the journal entry to admit Westbury. If an amount box does not require an entry, leave it blank. Marquis Westbury, Capital 18,750arrow_forward
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