On March 1, 2020, EE and FF decided to combine their business and form a partnership. Their balance sheets on March 1 before adjustments showed the following: They agreed to have the following items recorded in their books: 1. Provide 2% allowance for doubtful accounts. 2. EE’s furniture and fixtures should be $310,000, while FF’s office equipment is under-depreciated by $2,500. 3. Rent expense incurred previously by EE was not yet recorded amounting to $10,000, while salary expenses incurred by FF amounting to $8,000 was also not recorded. 4. The fair value of EE’s anf FF’s inventory amounted to $295,000 and $210,000 each respectively. 1. How much is the net (debit)/credit adjustment for EE and FF? EE FF EE FF A. 28,700 28,200 C. (8,700) 1,800 B. (28,700) (28,200) D. 8,700 (1,800) 2. How much is the total assets after the formation? A. 1,607,650 B. 1,570,850 C. 1,579,850 D. 1,568,750 3. If the partners are to share profits and losses in the ratio of 6:4 and their capital is top reflect this relationship, how much is the capital of FF after the formation? A. 400,000 B. 391,700 C. 369,740 D. 391,700
On March 1, 2020, EE and FF decided to combine their business and form a
They agreed to have the following items recorded in their books:
1. Provide 2% allowance for doubtful accounts.
2. EE’s furniture and fixtures should be $310,000, while FF’s office equipment is under-
3. Rent expense incurred previously by EE was not yet recorded amounting to $10,000, while salary expenses incurred by FF amounting to $8,000 was also not recorded.
4. The fair value of EE’s anf FF’s inventory amounted to $295,000 and $210,000 each respectively.
1. How much is the net (debit)/credit adjustment for EE and FF?
EE FF EE FF
A. 28,700 28,200 C. (8,700) 1,800
B. (28,700) (28,200) D. 8,700 (1,800)
2. How much is the total assets after the formation?
A. 1,607,650 B. 1,570,850 C. 1,579,850 D. 1,568,750
3. If the partners are to share
A. 400,000 B. 391,700 C. 369,740 D. 391,700
4. If the partners are to share profits and losses in the ratio of 6:4 and their capital is top reflect this relationship with EE’s capital to be used as basis, how much is the capital of FF after the formation?
A. 400,000 B. 391,700 C. 369,740 D. 391,700
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