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Hannah Freeman and Hugo Hernandez form a partnership by combining assets of their former businesses. The following balance sheet information is provided by Freeman, sole proprietorship: Hannah Freeman Proprietorship Balance Sheet June 1, 20Y3 Cash $36,150 Accounts receivable $68,000 Less: Allowance for doubtful accounts 4,000 64,000 Land 163,000 Equipment $63,000 Less: Accumulated depreciation-equipment 39,000 24,000 Total assets $287,150 Accounts payable $20,200 Notes payable 58,750 Hannah Freeman, capital 208,200 Total liabilities and owner's equity $287,150 Freeman obtained appraised values for the land and equipment as follows: Land $227,000 Equipment 18,700

Hannah Freeman and Hugo Hernandez form a partnership by combining assets of their former businesses. The following balance sheet information is provided by Freeman, sole proprietorship: Hannah Freeman Proprietorship Balance Sheet June 1, 20Y3 Cash $36,150 Accounts receivable $68,000 Less: Allowance for doubtful accounts 4,000 64,000 Land 163,000 Equipment $63,000 Less: Accumulated depreciation-equipment 39,000 24,000 Total assets $287,150 Accounts payable $20,200 Notes payable 58,750 Hannah Freeman, capital 208,200 Total liabilities and owner's equity $287,150 Freeman obtained appraised values for the land and equipment as follows: Land $227,000 Equipment 18,700

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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**Accounting Problem on Depreciation and Investment Journal Entry** The screen displays an accounting problem involving accumulated depreciation and the journal entry for a partnership investment by an individual named Freeman. The image shows a breakdown of assets, liabilities, and owner's equity. ### Detailed Breakdown: - **Accumulated Depreciation**: - Equipment: $39,000 and $24,000 - **Total Assets**: $287,150 - **Liabilities**: - Accounts Payable: $20,200 - Notes Payable: $58,750 - **Owner's Equity**: - Hannah Freeman, Capital: $208,200 - Total Liabilities and Owner’s Equity: $287,150 ### Land and Equipment Values: - Land: $227,000 - Equipment: $18,700 ### Additional Analysis: - An analysis of the accounts receivable indicated that the allowance for doubtful accounts should be increased to $5,800. ### Instruction: - **Journalize** the partnership’s entry for Freeman’s investment. If an amount box does not require an entry, leave it blank. ### Inputs for Journal Entry: The screen shows empty fields for the user to input the appropriate accounts and amounts as part of journalizing Freeman’s investment. Instructions provided encourage checking the work through a button labeled "Check My Work."
Transcribed Image Text:**Accounting Problem on Depreciation and Investment Journal Entry** The screen displays an accounting problem involving accumulated depreciation and the journal entry for a partnership investment by an individual named Freeman. The image shows a breakdown of assets, liabilities, and owner's equity. ### Detailed Breakdown: - **Accumulated Depreciation**: - Equipment: $39,000 and $24,000 - **Total Assets**: $287,150 - **Liabilities**: - Accounts Payable: $20,200 - Notes Payable: $58,750 - **Owner's Equity**: - Hannah Freeman, Capital: $208,200 - Total Liabilities and Owner’s Equity: $287,150 ### Land and Equipment Values: - Land: $227,000 - Equipment: $18,700 ### Additional Analysis: - An analysis of the accounts receivable indicated that the allowance for doubtful accounts should be increased to $5,800. ### Instruction: - **Journalize** the partnership’s entry for Freeman’s investment. If an amount box does not require an entry, leave it blank. ### Inputs for Journal Entry: The screen shows empty fields for the user to input the appropriate accounts and amounts as part of journalizing Freeman’s investment. Instructions provided encourage checking the work through a button labeled "Check My Work."
### Balance Sheet Explanation for Educational Purposes Hannah Freeman and Hugo Hernandez have formed a partnership by combining assets from their previous businesses. Below is the balance sheet information for Hannah Freeman's sole proprietorship as of June 1, 20Y3. **Hannah Freeman Proprietorship** **Balance Sheet** _Assets:_ - **Cash**: $36,150 - **Accounts Receivable**: $68,000 - Less: Allowance for Doubtful Accounts: $4,000 - Net Accounts Receivable: $64,000 - **Land**: $163,000 - **Equipment**: $63,000 - Less: Accumulated Depreciation - Equipment: $39,000 - Net Equipment: $24,000 _Total Assets: $287,150_ _Liabilities and Owner’s Equity:_ - **Accounts Payable**: $20,200 - **Notes Payable**: $58,750 _Owner’s Equity:_ - **Hannah Freeman, Capital**: $208,200 _Total Liabilities and Owner's Equity: $287,150_ The appraisal values obtained for land and equipment are as follows: - **Land**: $227,000 - **Equipment**: $18,700 This balance sheet provides a snapshot of the financial position of Hannah Freeman's business, listing assets, liabilities, and owner's equity at a specific point in time. The assets are balanced against liabilities and owner’s equity, ensuring the accounting equation holds true: \[ \text{Assets} = \text{Liabilities} + \text{Owner’s Equity} \]
Transcribed Image Text:### Balance Sheet Explanation for Educational Purposes Hannah Freeman and Hugo Hernandez have formed a partnership by combining assets from their previous businesses. Below is the balance sheet information for Hannah Freeman's sole proprietorship as of June 1, 20Y3. **Hannah Freeman Proprietorship** **Balance Sheet** _Assets:_ - **Cash**: $36,150 - **Accounts Receivable**: $68,000 - Less: Allowance for Doubtful Accounts: $4,000 - Net Accounts Receivable: $64,000 - **Land**: $163,000 - **Equipment**: $63,000 - Less: Accumulated Depreciation - Equipment: $39,000 - Net Equipment: $24,000 _Total Assets: $287,150_ _Liabilities and Owner’s Equity:_ - **Accounts Payable**: $20,200 - **Notes Payable**: $58,750 _Owner’s Equity:_ - **Hannah Freeman, Capital**: $208,200 _Total Liabilities and Owner's Equity: $287,150_ The appraisal values obtained for land and equipment are as follows: - **Land**: $227,000 - **Equipment**: $18,700 This balance sheet provides a snapshot of the financial position of Hannah Freeman's business, listing assets, liabilities, and owner's equity at a specific point in time. The assets are balanced against liabilities and owner’s equity, ensuring the accounting equation holds true: \[ \text{Assets} = \text{Liabilities} + \text{Owner’s Equity} \]
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