Explanation Partnership: A partnership is an unincorporated form of business which is formed by an agreement, owned and managed mutually by two or more individuals, who invest their assets in the business and share the liabilities and profits among themselves. Journal entry : Journal entry is a set of economic events which can be measured in monetary terms. These are recorded chronologically and systematically. Accounting rules for Journal entries: To record increase balance of account: Debit assets, expenses, losses and credit liabilities, capital, revenue and gains. To record decrease balance of account: Credit assets, expenses, losses and debit liabilities, capital, revenue and gains. Record the journal entry: Date Account titles and Explanation Debit Credit July 1 Cash $4,600 Accounts Receivable $4,200 Merchandise Inventory $28,580 Store Equipment $7,350 Allowance for bad debts $480 Notes payable $3,600 Accounts payable $7,690 Partner L, Capital $32,960 (To record investment of Partner L in partnership) Table (1) Cash is an asset and it is increased. Therefore, debit cash by $4,600. Accounts receivable is an asset and it is increased. Therefore, debit accounts receivable account by $4,200. Merchandise inventory is an asset and it is increased. Therefore, debit merchandise inventory account by $28,580. Store equipment is an asset and it is increased. Therefore, debit store equipment account by $7,350. Allowance for bad debts is a component of partners’ equity and it is increased. Therefore, credit allowance for bad debts account by $480. Notes payable is a liability and it is increased. Therefore, credit notes payable account by $3,600. Accounts payable is a liability and it is increased. Therefore, credit accounts payable account by $7,690...

23rd Edition

ISBN: 9781337794756

Author: HEINTZ, James A.

Publisher: Cengage Learning,

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Concept explainers

Partnership Accounting

A partnership is a kind of arrangement between two or more people whereby they agree to manage the business operations and share its profits and losses in an agreed ratio between them. The agreement that is drafted and signed by the partners of the firm …

Partner Admission and Withdrawal

Question

Chapter 19, Problem 6SPB

To determine

Prepare the opening entry for the formation of the Partnership L and W as of July 1, using fair values.

Expert Solution & Answer

Chapter 19 Solutions

College Accounting, Chapters 1-27

Ch. 19 - Prob. 1TF Ch. 19 - Prob. 2TF Ch. 19 - Prob. 3TF Ch. 19 - Prob. 4TF Ch. 19 - Prob. 5TF Ch. 19 - Prob. 1MC Ch. 19 - Prob. 2MC Ch. 19 - Prob. 3MC Ch. 19 - Prob. 4MC Ch. 19 - Prob. 5MC

Ch. 19 - Prob. 1CE Ch. 19 - Prob. 2CE Ch. 19 - Prob. 3CE Ch. 19 - Prob. 4CE Ch. 19 - Prob. 5CE Ch. 19 - Prob. 1RQ Ch. 19 - Prob. 2RQ Ch. 19 - Prob. 3RQ Ch. 19 - Prob. 4RQ Ch. 19 - Prob. 5RQ Ch. 19 - Prob. 6RQ Ch. 19 - Prob. 7RQ Ch. 19 - Prob. 8RQ Ch. 19 - Prob. 9RQ Ch. 19 - Prob. 1SEA Ch. 19 - Prob. 2SEA Ch. 19 - Prob. 3SEA Ch. 19 - Prob. 4SEA Ch. 19 - ENTRIES: PARTNERSHIP LIQUIDATION On liquidation of...Ch. 19 - Prob. 6SPA Ch. 19 - Prob. 7SPA Ch. 19 - Prob. 8SPA Ch. 19 - Prob. 9SPA Ch. 19 - STATEMENT OF PARTNER SHIP LIQUIDATION WITH LOSS...Ch. 19 - Prob. 1SEB Ch. 19 - Prob. 2SEB Ch. 19 - Prob. 3SEB Ch. 19 - Prob. 4SEB Ch. 19 - Prob. 5SEB Ch. 19 - Prob. 6SPB Ch. 19 - Prob. 7SPB Ch. 19 - ENTRIES FOR DISSOLUTION OF PARTNERSHIP Cummings...Ch. 19 - Prob. 9SPB Ch. 19 - STATEMENT OF PARTNER SHIP LIQUIDATION WITH LOSS...Ch. 19 - Prob. 1MYW Ch. 19 - Prob. 1EC Ch. 19 - Prob. 1MP Ch. 19 - Prob. 1CP Ch. 19 - Prob. 1COP

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