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 with a cost of $185,000 and accumulated depreciation of $105,000. The partners agree that the equipment is to be valued at $67,800, that $3,300 of the accounts receivable are completely worthless and are not to be accepted by the partnership, and that $1,900 is a reasonable allowance for the uncollectibility of the remaining accounts receivable. Tim contributes cash of $20,000 and merchandise inventory of $45,000. The partners agree that the merchandise inventory is to be valued at $48,500. 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

Alijah Galloway

Business

3 January, 05:12

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 with a cost of $185,000 and accumulated depreciation of $105,000. The partners agree that the equipment is to be valued at $67,800, that $3,300 of the accounts receivable are completely worthless and are not to be accepted by the partnership, and that $1,900 is a reasonable allowance for the uncollectibility of the remaining accounts receivable. Tim contributes cash of $20,000 and merchandise inventory of $45,000. The partners agree that the merchandise inventory is to be valued at $48,500. 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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Answers (1)

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Leroy Cunningham · Answer 1

(a) Jesse's investment is 108400 (b) Tim's investment is 68500

Explanation:

Solution

We Journalize the entries for both Jesse and Tim in the books of Partnership accounts

(a) Jesse's Investment

Account Name Debit ($) Credit ($)

Accounts Receivable

(46000-3500) 42500

Equipment (Agreed Price) 67800

Allowance for Doubtful Debts 1900

Jesse, Capital A/c 108400

(b) Tim's Investment

Cash 20000

Inventory (At Agreed price) 48500

Tim Capital 68500