March 1, 20Y8, Eric Keene and Renee Wallace form a partnership. Keene agrees to invest $23,400 in cash and merchandise inventory valued at $62,600. Wallace invests certain business assets at valuations agreed upon, transfers business liabilities, and contributes sufficient cash to bring her total capital to $60,000. Details regarding the book values of the business assets and liabilities, and the agreed valuations, follow in the image below. The partnership agreement includes the following provisions regarding the division of net income: interest on original investments at 10%, salary allowances of $19,000 (Keene) and $24,000 (Wallace), and the remainder equally. The journal entries for both Keene and Wallace are also attached below. Prepare a balance sheet as of March 1, 20Y8, the date of formation of the partnership of Keene and Wallace.
March 1, 20Y8, Eric Keene and Renee Wallace form a partnership. Keene agrees to invest $23,400 in cash and merchandise inventory valued at $62,600. Wallace invests certain business assets at valuations agreed upon, transfers business liabilities, and contributes sufficient cash to bring her total capital to $60,000. Details regarding the book values of the business assets and liabilities, and the agreed valuations, follow in the image below. The partnership agreement includes the following provisions regarding the division of net income: interest on original investments at 10%, salary allowances of $19,000 (Keene) and $24,000 (Wallace), and the remainder equally. The journal entries for both Keene and Wallace are also attached below. Prepare a balance sheet as of March 1, 20Y8, the date of formation of the partnership of Keene and Wallace.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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On March 1, 20Y8, Eric Keene and Renee Wallace form a partnership. Keene agrees to invest $23,400 in cash and merchandise inventory valued at $62,600. Wallace invests certain business assets at valuations agreed upon, transfers business liabilities, and contributes sufficient cash to bring her total capital to $60,000. Details regarding the book values of the business assets and liabilities, and the agreed valuations, follow in the image below.
The partnership agreement includes the following provisions regarding the division of net income: interest on original investments at 10%, salary allowances of $19,000 (Keene) and $24,000 (Wallace), and the remainder equally.
The
Prepare a balance sheet as of March 1, 20Y8, the date of formation of the partnership of Keene and Wallace.
Transcribed Image Text:0.
Keene Joumal:
Pate Accounts I Vebit Credit
31, I Cash
Merch -
162,600
Invantory
(beene
Caphul
86,006
Walloce
Dale Accounts Debit Credit
3/1
(ash 3a 000
Areouns
Receivable
Equioment 55400
(as00
AFDA
fcouts
Parable
(Noto,
1400
37500
Payable
Wallae,
Capital
60000
Transcribed Image Text:Wallace's Ledger
Balance
$19,900
1,200
Agreed-Upon
Valuation
$19,500
1,400
Accounts Receivable
Allowance for Doubtful Accounts
Equipment
Accumulated Depreciation-Equipment
Accounts Payable
83,500)
29,800
15,000
55,400
15,000
Notes Payable (current)
37,500
37,500
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