operate as Richey and Price Angler’s Outpost. Richey's Tackle Center Postclosing Trial Balance December 31, 20X1 Account Name Debit Credit Cash $19,000 Accounts Receivable 65,600 Allowance for Doubtful Accounts $10,000 Merchandise Inventory 180,000 Furniture and Equipment 116,400 Accumulated Depreciation 92,000 Accounts Payable 16,000 Capital 263,000 Totals $381,000 $381,000 Required: In general journal form, prepare the entries to record: The receipt of Richey’s investment of assets and liabilities by the partnership. The re
operate as Richey and Price Angler’s Outpost. Richey's Tackle Center Postclosing Trial Balance December 31, 20X1 Account Name Debit Credit Cash $19,000 Accounts Receivable 65,600 Allowance for Doubtful Accounts $10,000 Merchandise Inventory 180,000 Furniture and Equipment 116,400 Accumulated Depreciation 92,000 Accounts Payable 16,000 Capital 263,000 Totals $381,000 $381,000 Required: In general journal form, prepare the entries to record: The receipt of Richey’s investment of assets and liabilities by the partnership. The re
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Thomas Richey operates a small shop that sells fishing equipment. His postclosing trial balance on December 31, 20X1, is shown below. Richey plans to enter into a partnership with Kathryn Price, effective January 1, 20X2. Profits and losses will be shared equally. Richey is to transfer all assets and liabilities of his store to the partnership after revaluation as agreed. Price will invest cash equal to Richey’s investment after revaluation. The agreed values are Accounts Receivable (net), $58,000; Merchandise Inventory, $199,600; and Furniture and Equipment, $49,200. The partnership will operate as Richey and Price Angler’s Outpost. Richey's Tackle Center Postclosing Trial Balance December 31, 20X1 Account Name Debit Credit Cash $19,000 Accounts Receivable 65,600 Allowance for Doubtful Accounts $10,000 Merchandise Inventory 180,000 Furniture and Equipment 116,400 Accumulated Depreciation 92,000 Accounts Payable 16,000 Capital 263,000 Totals $381,000 $381,000 Required: In general journal form, prepare the entries to record: The receipt of Richey’s investment of assets and liabilities by the partnership. The receipt of Price’s investment of cash. Prepare a balance sheet for Richey and Price Angler’s Outpost just after the investments. Analyze: By what net amount were the net assets of Richey’s Tackle Center adjusted before they were transferred to the partnership?
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