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 $177,000 and accumulated depreciation of $99,000. The partners agree that the equipment is to be valued at $68,100, that $3,800 of the accounts receivable are completely 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 contributes cash of $21,500 and merchandise inventory of $45,500. The partners agree that the merchandise inventory is to be valued at $49,000. Journalize the entries to record in the partnership accounts (a) Jesse's investment and (b) Tim's investment. If an amount box does not require an entry, leave it blank.

Question

Diego

Business

7 July, 08:51

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 $177,000 and accumulated depreciation of $99,000. The partners agree that the equipment is to be valued at $68,100, that $3,800 of the accounts receivable are completely 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 contributes cash of $21,500 and merchandise inventory of $45,500. The partners agree that the merchandise inventory is to be valued at $49,000. Journalize the entries to record in the partnership accounts (a) Jesse's investment and (b) Tim's investment. If an amount box does not require an entry, leave it blank.

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Elaine Serrano · Answer 1

The journal entries are shown below:

a. For Jesse's investment

Account receivable A/c Dr $43,200 ($47,000 - $3,800)

Equipment A/c Dr $68,100

To Allowance for Doubtful Debts A/c $1,800

To Jesse, Capital A/c (Balancing figure) $109,500

(Being the investment is recorded)

b. For Tim's investment

Cash A/c Dr $21,500

Inventory A/c Dr $49,000

To Tim capital A/c (Balancing figure) $70,500

(Being the investment is recorded)