Ed and John decide to combine their two businesses to form a partnership. Ed contributes merchandise inventory with a book value of $70,000 and equipment with a book value of $150,000 and accumulated depreciation of $60,000. John contributes cash of $10,000 and accounts receivable of $20,000. The two agree that the inventory and the equipment should be valued at $65,000 and $95,000. They also agree that $2,000 of the accounts receivable is completely worthless and that an allowance for doubtful accounts for $5,000 should be included.
Ed and John decide to combine their two businesses to form a partnership. Ed contributes merchandise inventory with a book value of $70,000 and equipment with a book value of $150,000 and accumulated depreciation of $60,000. John contributes cash of $10,000 and accounts receivable of $20,000. The two agree that the inventory and the equipment should be valued at $65,000 and $95,000. They also agree that $2,000 of the accounts receivable is completely worthless and that an allowance for doubtful accounts for $5,000 should be included.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Ed and John decide to combine their two businesses to form a
Transcribed Image Text:a. Journalize Ed's contribution.
DATE
Debit
Credit
X/X
b. Journalize John's contribution.
DATE
X/X
Debit
Credit
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