On June 30, 2003, two separate proprietorships—Playstation and 3D Gaming—which develop computer games agree to combine their operations and form a partnership. The new partnership will be known as Interplay@. Playstation doesn’t have any assets worth transferring into the new partnership. The owner, G. LeBlanc, agrees to invest $1,000 in cash. 3D Gaming transfers the following assets and liabilities into the partnership at fair market values: Net Book Value Fair Market Value Cash $ 9,000 $ 9,000 Accounts receivable 20,000 18,000 Allowance for doubtful accounts 1,000 1,500 Computer hardware and software 50,000 15,000 Accumulated amortization— computer hardware and software 30,000 Accounts payable 15,000 15,000 Notes payable 25,000 25,000 Instructions 1) Prepare a balance sheet for the Interplay@ partnership on June 30, 2003
On June 30, 2003, two separate proprietorships—Playstation and 3D Gaming—which develop computer games agree to combine their operations and form a partnership. The new partnership will be known as Interplay@. Playstation doesn’t have any assets worth transferring into the new partnership. The owner, G. LeBlanc, agrees to invest $1,000 in cash. 3D Gaming transfers the following assets and liabilities into the partnership at fair market values:
Net Book Value Fair Market Value
Cash $ 9,000 $ 9,000
Allowance for doubtful accounts 1,000 1,500
Computer hardware and software 50,000 15,000
Accumulated amortization—
computer hardware and software 30,000
Accounts payable 15,000 15,000
Notes payable 25,000 25,000
Instructions
1) Prepare a
Step by step
Solved in 2 steps
