EX 12-2 Record partner’s original investment

Jessica Kimble and Carlos Segura form a partnership by combining assets of their former businesses. The following balance sheet information is provided by Kimble, sole proprietorship:



Cash $ 50,000 Accounts receivable $100,000 Less: Allowance for doubtful accounts       5,900 94,100 Land 180,000 Equipment $ 70,000 Less: Accumulated depreciation—equipment     43,000 27,000 Total assets $351,100 Accounts payable $ 22,500 Notes payable 80,000 Jessica Kimble, capital 248,600 Total liabilities and owner’s equity $351,100 Kimble obtained appraised values for the land and equipment as follows:
Land $284,000 Equipment 19,000 


An analysis of the accounts receivable indicated that the allowance for doubtful accounts should be increased to $7,000. Journalize the partnership’s entry for Kimble’s investment.

Answer:

Cash ..................................................................................... 50,000 Accounts Receivable.......................................................... 100,000 Land...................................................................................... 284,000 Equipment............................................................................ 19,000  Allowance for Doubtful Accounts ................................  7,000  Accounts Payable..........................................................  22,500  Notes Payable................................................................  80,000  Jessica Kimble, Capital.................................................  343,500 

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