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John and Jane are entering into a partnership, contributing their sole proprietorship business to the partnership. Their separate businesses have the following assets and liabilities as of 31 December 2022:

John and Jane are entering into a partnership, contributing their sole proprietorship business to the partnership. Their separate businesses have the following assets and liabilities as of 31 December 2022:

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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Make a Journal entry, General ledger for adjusting entries, statement of financial position, and Opening Entry in the partnership book in this problem

John and Jane are entering into a partnership, contributing their sole proprietorship business to the partnership. Their separate businesses have the following assets and liabilities as of 31 December 2022: Assets: Cash Accounts Receivable Inventory Equipment Accu. Depreciation-Equipment Furniture's and Fixtures Accu. Depreciation-Fur&Fix Land Total Assets Liabilities: Accounts Payable Loans Payable Total Liabilities Capital Total Liabilities & Equity Inventory Furniture's & Fixtures JOHN 20,000 130,000 80,000 150,000 (10,000) John and Jane have agreed to value the assets as follows: JOHN 160,000 380,000 50,000 ● 50,000 330,000 380,000 ● Prepare the following: Journal Entry General Ledger for Adjusting Entries Statement of Financial Position Opening Entry in the Partnership Book JANE 15,000 60,000 70,000 (5,000) 300,000 440,000 100,000 Additional agreements will be as follows: Accounts receivable will be subject to 17.5% allowance for uncollectable accounts. John's equipment has a useful life of 10 years and no salvage value. 340,000 440,000 They have also agreed to assume liabilities as part of the partnership agreement. The loan payable had an interest rate of 6% per annum, and Jane's year-end is 31 December 2022. Therefore, Jane needs to accrue interest for the month of December 2022. JANE 50,000 60,000
Transcribed Image Text:John and Jane are entering into a partnership, contributing their sole proprietorship business to the partnership. Their separate businesses have the following assets and liabilities as of 31 December 2022: Assets: Cash Accounts Receivable Inventory Equipment Accu. Depreciation-Equipment Furniture's and Fixtures Accu. Depreciation-Fur&Fix Land Total Assets Liabilities: Accounts Payable Loans Payable Total Liabilities Capital Total Liabilities & Equity Inventory Furniture's & Fixtures JOHN 20,000 130,000 80,000 150,000 (10,000) John and Jane have agreed to value the assets as follows: JOHN 160,000 380,000 50,000 ● 50,000 330,000 380,000 ● Prepare the following: Journal Entry General Ledger for Adjusting Entries Statement of Financial Position Opening Entry in the Partnership Book JANE 15,000 60,000 70,000 (5,000) 300,000 440,000 100,000 Additional agreements will be as follows: Accounts receivable will be subject to 17.5% allowance for uncollectable accounts. John's equipment has a useful life of 10 years and no salvage value. 340,000 440,000 They have also agreed to assume liabilities as part of the partnership agreement. The loan payable had an interest rate of 6% per annum, and Jane's year-end is 31 December 2022. Therefore, Jane needs to accrue interest for the month of December 2022. JANE 50,000 60,000
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