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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 $178,000 and accumulated depreciation of $102,000. The partners agree that the equipment is to be valued at $68,400, that $4,000 of the accounts receivable are completely worthless and are not to be accepted by the partnership, and that $2,200 is a reasonable allowance for the uncollectibility of the remaining accounts receivable. Tim contributes cash of $20,500 and merchandise inventory of $45,000. The partners agree that the merchandise inventory is to be valued at $48,500 Required: Journalize the entries to record in the partnership accounts (a) Jesse's investment and (b) Tim's investment. Refer to the Chart of Accounts for exact wording of account titles.

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 $178,000 and accumulated depreciation of $102,000. The partners agree that the equipment is to be valued at $68,400, that $4,000 of the accounts receivable are completely worthless and are not to be accepted by the partnership, and that $2,200 is a reasonable allowance for the uncollectibility of the remaining accounts receivable. Tim contributes cash of $20,500 and merchandise inventory of $45,000. The partners agree that the merchandise inventory is to be valued at $48,500 Required: Journalize the entries to record in the partnership accounts (a) Jesse's investment and (b) Tim's investment. Refer to the Chart of Accounts for exact wording of account titles.

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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### Instructions 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 $178,000 and accumulated depreciation of $102,000. The partners agree that the equipment is to be valued at $68,400, that $4,000 of the accounts receivable are completely worthless and are not to be accepted by the partnership, and that $2,200 is a reasonable allowance for the uncollectibility of the remaining accounts receivable. Tim contributes cash of $20,500 and merchandise inventory of $45,000. The partners agree that the merchandise inventory is to be valued at $48,500. #### Required: Journalize the entries to record in the partnership accounts: 1. Jesse's investment 2. Tim's investment Refer to the Chart of Accounts for exact wording of account titles. --- ### Explanation When forming a partnership, the assets and their respective values from the separate businesses of each partner are combined and recorded. Below is a detailed process to journalize the entries for both Jesse’s and Tim’s investments: #### Jesse’s Investment: 1. **Accounts Receivable:** - Face Value: $47,000 - Worthless Receivables: $4,000 - Uncollectible Allowance: $2,200 - Net Realizable Value: $47,000 - $4,000 - $2,200 = $40,800 2. **Equipment:** - Original Cost: $178,000 - Accumulated Depreciation: $102,000 - Book Value Agreed: $68,400 Journal Entry: ``` Accounts Receivable 40,800 Equipment 68,400 Accumulated Depreciation 102,000 Jessie, Capital 7,200 Allowance for Doubtful Accounts 2,200 Jessie, Capital 40,800 ``` #### Tim’s Investment: 1. **Cash:** - Amount: $20,500 2. **Merchandise Inventory:** - Original Value: $45,000 - Agreed Value: $48,500 Journal Entry: ``` Cash 20,500 Merchandise Inventory 48,500 Tim,
Transcribed Image Text:### Instructions 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 $178,000 and accumulated depreciation of $102,000. The partners agree that the equipment is to be valued at $68,400, that $4,000 of the accounts receivable are completely worthless and are not to be accepted by the partnership, and that $2,200 is a reasonable allowance for the uncollectibility of the remaining accounts receivable. Tim contributes cash of $20,500 and merchandise inventory of $45,000. The partners agree that the merchandise inventory is to be valued at $48,500. #### Required: Journalize the entries to record in the partnership accounts: 1. Jesse's investment 2. Tim's investment Refer to the Chart of Accounts for exact wording of account titles. --- ### Explanation When forming a partnership, the assets and their respective values from the separate businesses of each partner are combined and recorded. Below is a detailed process to journalize the entries for both Jesse’s and Tim’s investments: #### Jesse’s Investment: 1. **Accounts Receivable:** - Face Value: $47,000 - Worthless Receivables: $4,000 - Uncollectible Allowance: $2,200 - Net Realizable Value: $47,000 - $4,000 - $2,200 = $40,800 2. **Equipment:** - Original Cost: $178,000 - Accumulated Depreciation: $102,000 - Book Value Agreed: $68,400 Journal Entry: ``` Accounts Receivable 40,800 Equipment 68,400 Accumulated Depreciation 102,000 Jessie, Capital 7,200 Allowance for Doubtful Accounts 2,200 Jessie, Capital 40,800 ``` #### Tim’s Investment: 1. **Cash:** - Amount: $20,500 2. **Merchandise Inventory:** - Original Value: $45,000 - Agreed Value: $48,500 Journal Entry: ``` Cash 20,500 Merchandise Inventory 48,500 Tim,
### General Journal and Investment Reporting Explained #### General Journal (Page 1) The General Journal is a crucial part of the accounting process. It serves as the initial recording point for all financial transactions, organized in chronological order. Each transaction typically involves at least one debit and one credit entry to maintain the balance in the accounting equation. Below is a blank template of a General Journal waiting to be populated with transaction data. **Structure of the General Journal:** - **Columns:** 1. **DATE:** This column is used to record the date of the transaction. 2. **DESCRIPTION:** This column provides a brief description or narrative of the transaction. 3. **POST. REF.:** The Posting Reference column is used to note the account code or reference number associated with the ledger entry. 4. **DEBIT:** This column is for the amounts to be debited (added to the account). 5. **CREDIT:** This column is for the amounts to be credited (subtracted from the account). Below is the visual representation of the General Journal template: ``` ----------------------------------- | DATE | DESCRIPTION | POST. REF. | DEBIT | CREDIT | ----------------------------------- | | | | | | | | | | | | | | | | | | | | | | | | ----------------------------------- ``` #### Tim’s Investment (Page 1) Similarly, Tim's Investment Journal is structured to keep track of all transactions pertaining to Tim’s specific investments. Each entry involves keeping a meticulous record of the date, description, relevant posting reference, and the amount debited or credited. **Structure of Tim’s Investment Journal:** - **Columns:** 1. **DATE:** The exact date when the investment transaction took place. 2. **DESCRIPTION:** A brief narrative explaining the nature of the investment transaction. 3. **POST. REF.:** The Posting Reference number associated with the investment entry. 4. **DEBIT:** The debit column to record amounts added to the investment. 5. **CREDIT:** The credit column to record amounts deducted from the investment. Below is the visual representation of Tim's Investment Journal template: ``` ----------------------------------- | DATE | DESCRIPTION | POST. REF. | DEBIT | CREDIT | ----------------------------------- | | | | |
Transcribed Image Text:### General Journal and Investment Reporting Explained #### General Journal (Page 1) The General Journal is a crucial part of the accounting process. It serves as the initial recording point for all financial transactions, organized in chronological order. Each transaction typically involves at least one debit and one credit entry to maintain the balance in the accounting equation. Below is a blank template of a General Journal waiting to be populated with transaction data. **Structure of the General Journal:** - **Columns:** 1. **DATE:** This column is used to record the date of the transaction. 2. **DESCRIPTION:** This column provides a brief description or narrative of the transaction. 3. **POST. REF.:** The Posting Reference column is used to note the account code or reference number associated with the ledger entry. 4. **DEBIT:** This column is for the amounts to be debited (added to the account). 5. **CREDIT:** This column is for the amounts to be credited (subtracted from the account). Below is the visual representation of the General Journal template: ``` ----------------------------------- | DATE | DESCRIPTION | POST. REF. | DEBIT | CREDIT | ----------------------------------- | | | | | | | | | | | | | | | | | | | | | | | | ----------------------------------- ``` #### Tim’s Investment (Page 1) Similarly, Tim's Investment Journal is structured to keep track of all transactions pertaining to Tim’s specific investments. Each entry involves keeping a meticulous record of the date, description, relevant posting reference, and the amount debited or credited. **Structure of Tim’s Investment Journal:** - **Columns:** 1. **DATE:** The exact date when the investment transaction took place. 2. **DESCRIPTION:** A brief narrative explaining the nature of the investment transaction. 3. **POST. REF.:** The Posting Reference number associated with the investment entry. 4. **DEBIT:** The debit column to record amounts added to the investment. 5. **CREDIT:** The credit column to record amounts deducted from the investment. Below is the visual representation of Tim's Investment Journal template: ``` ----------------------------------- | DATE | DESCRIPTION | POST. REF. | DEBIT | CREDIT | ----------------------------------- | | | | |
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