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:
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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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