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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.

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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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 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.

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: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
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
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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