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On April 1, 20Y1, Whitney Lang and Eli Capri form a partnership. L nventory valued at $34,800. Capri invests certain business assets iabilities, and contributes sufficient cash to bring his total capital business assets and liabilities, and the agreed valuations, follow:

On April 1, 20Y1, Whitney Lang and Eli Capri form a partnership. L nventory valued at $34,800. Capri invests certain business assets iabilities, and contributes sufficient cash to bring his total capital business assets and liabilities, and the agreed valuations, follow:

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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Entries and Balance Sheet for Partnership On April 1, 20Y1, Whitney Lang and Eli Capri form a partnership. Lang agrees to invest $12,900 cash and merchandise inventory valued at $34,800. Capri invests certain business assets at valuations agreed upon, transfers business liabilities, and contributes sufficient cash to bring his total capital to $86,000. Details regarding the book values of the business assets and liabilities, and the agreed valuations, follow: Accounts Receivable Allowance for Doubtful Accounts Merchandise Inventory Equipment Accumulated Depreciation-Equipment Accounts Payable Notes Payable (current) Capri's Ledger Balance. $19,700 900 23,000 38,700 12,900 7,000 4,300 Agreed-Upon Balance $16,000 1,100 30,800 37,500 7,000 4,300 The partnership agreement includes the following provisions regarding the division of net income: interest of 8% on original investments, salary allowances of $38,700 (Lang) and $23,600 (Capri), and the remainder equally.
Transcribed Image Text:Entries and Balance Sheet for Partnership On April 1, 20Y1, Whitney Lang and Eli Capri form a partnership. Lang agrees to invest $12,900 cash and merchandise inventory valued at $34,800. Capri invests certain business assets at valuations agreed upon, transfers business liabilities, and contributes sufficient cash to bring his total capital to $86,000. Details regarding the book values of the business assets and liabilities, and the agreed valuations, follow: Accounts Receivable Allowance for Doubtful Accounts Merchandise Inventory Equipment Accumulated Depreciation-Equipment Accounts Payable Notes Payable (current) Capri's Ledger Balance. $19,700 900 23,000 38,700 12,900 7,000 4,300 Agreed-Upon Balance $16,000 1,100 30,800 37,500 7,000 4,300 The partnership agreement includes the following provisions regarding the division of net income: interest of 8% on original investments, salary allowances of $38,700 (Lang) and $23,600 (Capri), and the remainder equally.
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